Tribute: Economic recovery in Ghana: Dr Joe Abbey
Ghana’s economic recovery, during a decade often referred to as “Africa’s Lost Decade”, owes much to the innovative brilliance, patriotic dedication and sheer hard work of Dr Joseph Leo Nii Sekoh Abbey.
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He, sadly, breathed his last on Sunday, May 28, 2023, but his role in rescuing Ghana from economic collapse to becoming a stable, steadily growing economy over more than two decades must not be forgotten.
From the earliest months of the government of the Provisional National Defence Council (PNDC), under Chairman Rawlings in 1982, Joe Abbey began the clear-minded analysis of what it would take to generate and stimulate real output in an economy that had suffered rapid economic decline in the past decade.
Joe led the technical assessment of how key sectors of the economy could be propelled onto a growth path that recognised the critical role of the real producers of the wealth of the nation.
He worked with a team of younger economists (including, particularly, his distinguished former student at the Economics Department of the University of Ghana, Legon, the late Dr Gobind Nankani.)
In pursuit of an appropriate exchange rate, rather than simplistically pursuing a drastic, across-the-board devaluation of the cedi in one fell swoop, Joe led the design, during a period of transition, of an innovative system of “bonuses and surcharges” whereby bonuses were awarded to the earners of hard currency while users were surcharged for access to these scarce resources.
If nothing else, this was a learning moment for the nation about appreciating the value of those who generated the foreign exchange for the country and the real cost of the imports that we use the foreign exchange to purchase.
Cocoa farmers, for instance, had to be given their due, which required an appropriate valuation in local currency terms of the foreign exchange earnings from cocoa exports.
Even as world market prices for cocoa were reaching their peak in the late 1970s, the share of the Ghanaian farmer in the revenues from cocoa exports was as low as 26 per cent, while the share of export duty was 60 per cent.
Cocoa producer prices in Ghana were reduced in real terms to about 15 per cent of the level attained in 1963.
No wonder cocoa production in Ghana, just before the Economic Recovery Programme, had fallen to less than half of its historical high.
The programme that was initiated based on the technical analysis Joe Abbey and the team undertook, began a major transformation in economic fortunes for the nation and, particularly, the cocoa farmer.
By the end of the millennium, the share of the farmer in cocoa export revenues had steadily climbed closer to 60 per cent from 26 per cent, meaning significant resource transfers to the rural population over the period.
Confidence
It was to the credit of Dr Abbey that he earned the confidence of Chairman Rawlings and the PNDC to back his insistence on tough decisions, albeit carefully modulated, as the best way to reverse Ghana’s economic decline and set us on a new and better path.
The disincentives to the productive sector that the over-valuation of the local currency had brought about and the distortions and negative tendencies, which had led to a downward spiral of the economy began to be dismantled.
The reforms were initiated before the negotiations, which led to the landmark agreement with the International Monetary Fund (IMF) in April 1983 on a stabilisation programme.
In the evolution of the Economic Recovery Programme, among other things, a system of licensing forex bureau was introduced to enable an open market in foreign currency in place of the underground parallel market and the previously failed efforts to control the exchange rate administratively.
These bureaux (the IMF again took some convincing about their institution), have remained a stable feature of the foreign management system over the past almost four decades.
While not diminishing the important roles of others in those and subsequent negotiations with the IMF, one cannot but recognise that the clear leader in the technical work that underlay these negotiations was Dr JLS Abbey.
He and the late Dr Kwesi Botchwey, the PNDC Secretary for Finance, and the leader of the Ghana negotiating team, were a formidable pair who became well-known and highly respected in the corridors of the IMF as they put forward Ghana’s position in intense negotiations.
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A young member of the team at some point in that time, who later worked at the IMF, Alex Kyei, recollects the following: “Almost thirty years ago, as a junior member of the Economic Management Team, led by the just departed Joe Abbey and the late Kwesi Botchwey, we told the IMF what we wanted to achieve” and “Joe Abbey dazzled the IMF with his knowledge of statistics and econometrics”.
Joe was constantly and acutely sensitive to the real-world impacts of economic decision-making.
He saw the need to adjust labour incomes as a regular feature of the economic reform effort, both as a matter of fairness and efficacy in seeking to incentivise the factors of production.
Well-versed as he was in the macro-economic paradigm of the IMF, Joe Abbey relentlessly insisted on the need to adapt it to addressing specific national circumstances rather than imposing prescriptions that may have worked in different contexts elsewhere.
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Embracing the need for proactive steps to protect the poor and vulnerable, he recognised the value of the Programme of Actions to Mitigate the Social Costs of Adjustment (PAMSCAD) as an integral part of the Economic Recovery Programme and insisted on this with the IMF.
Remarkably, in subsequent decades, poverty alleviation, empowering the poor and ensuring more equity became tenets which heads of the IMF began to highlight as important for the success of IMF programmes.
Team player
The team player that he was, Dr Abbey never sought the limelight and was not concerned about his specific position or title in the Economic Management Team.
Whether as a member of the 1982 Economic Review Committee, or in subsequent roles as Ghana’s High Commissioner to Canada or the United Kingdom, or Ambassador to the United States, Joe remained central to the economic decision-making that began to steer the nation’s economy on the path of recovery to sustained growth.
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He made his sterling contributions without seeking special rewards or personal gain, staying modest throughout his life.
More than ever, the life and work of Joe Abbey could today shine a light on our path for the future.
Perhaps, his death will inspire the current generation of economists to reflect on his vital contribution to the nation and to the crafting of innovative, locally rooted solutions in times of national crisis.
Joe’s fiercely selfless focus on what was in the national interest, his integrity and patriotic dedication and his innovative problem-solving approaches must challenge us all.
What an example of public service!
To his widow, Beatrice, his children and his family, our sincere condolences on the passing of this giant figure who gave his all in setting Ghana on the path to economic recovery.
May he rest in perfect peace in the bosom of the Lord.
Afee noko.