2 Ways to manage economy - Manifesto battle

With 16 days to the crucial general election on December 7, the two main political parties, the governing New Patriotic Party (NPP) and the opposition National Democratic Congress (NDC), have intensified campaigns on their manifestos that appear similar in many ways but depart in several other means.

In typical fashion, both parties promise more fiscal discipline without stating how they intend to achieve them except agreeing on appointing less ministers and removing some taxes.

A glimpse of the manifestos of the two parties appears decidedly overly ambitious, with some pundits warning that any party that wins power will not be able to fulfil its campaign promises.

This is because the manifestos are heavy on promises and freebies but lack practical strategies and resource mobilisation plans to implement them after winning power.

Professor Godfred Bokpin, Professor Peter Quartey and Dr Said Boakye are unanimous in their convictions that the strict adherence to manifestos has not helped the course of development for the country.

At the basic level, the NPP promises to introduce a fully digitalised economy to improve operational efficiencies and productivity while reducing corruption by minimising human interface in the delivery of public goods and services.

The NDC on the other hand bases its campaign on introducing a 24-hour economy, using two or three shifts of working hours to step up production.

Analysts say the NPP’s plan to focus on digital skills acquisition to create one million new jobs ignores the biggest obstacle to economic growth, the lack of a local productive capacity, which forces the country to be import dependent.

Critics say digitalisation is a service activity and without manufacturing underpinning it, the fundamental problems of balance of payments deficits will still remain. 

For the NDC’s 24-hour economy, experts contend that the plan is medium to long-term, but may potentially suffer constraints to deliver quality wages and salaries for labour in the shift system.

The policy could also potentially suffer from the lack of machinery and technology to compete with imported goods in terms of pricing.

But the biggest point of departure between the two parties, in their respective manifestos, is the issue of business ownership. 

Local content

Both parties have pitched their own proposed solutions against the other but realism requires that whoever wins the election would need to combine increased production hours in the private sector with digital delivery of public sector goods and services.

But Economist and Professor of Finance at the University of Ghana Business School, Godfred Bokpin, believes voters may be disappointed because the two parties may only deliver between 40 and 45 per cent of their manifesto promises when in power.

This is because both parties are promising many tax reliefs and a massive investment in infrastructure without stating how the fiscal deficit could be bridged. 

“Looking at the revenue programmes presented by the political parties, I think the most realistic estimate is between 40 and 45 per cent in terms of quantity, not quality,” the university don said in an interview.

Fiscal gaps

The concern for many analysts is that both manifestos are promising lower taxes, but at the same time canvassing for increased expenditure for infrastructure and social interventions.

It is unclear how the two parties will fund the recurrent fiscal gap of between GH¢8 billion and GH¢10 billion annually, even based on current public expenditure trends.

Currently, Ghana faces fiscal constraints and uncompleted projects dating back to 2012, making it challenging to take on new projects.

“Ghanaians may be disappointed, and therefore, they should temper their expectations. All political parties make similar promises, but the difference lies in their delivery,” he said.

Some of these promises are medium to long-term, requiring 10 to 15 years to implement and impact ordinary Ghanaians. For instance, both parties’ promises from 2012 till date remain unfulfilled.

Professor Bokpin said the proposed government size is also concerning, with the NDC and NPP aiming for around 50 ministers each.

“I believe we should revisit the constitution and consider reducing the number of ministers to 19, with a few supporting ministries, totalling less than 40”.

This, he said, would free up resources and save one per cent of the country’s budget, and would be more beneficial than maintaining an oversized government.

“Ghanaians should be cautious not to bank their hopes solely on these promises, as we've seen similar unfulfilled promises in the past. Given our current IMF programme, we need to ease restrictions on economic growth,” he said.

He said winning the heart of investors will be the game changer in 2025, which he says will depend on the quality of leadership for the party that wins power.

Meanwhile, two other economists have bemoaned the increasing resort to political party manifestos as blueprints to governing the country.

They said the lack of a long-term development plan to which political parties could align their policies had ensured that the parties turned campaign promises into development policies, which they forcefully implemented when they won power, irrespective of the dangers such policies posed to the economy and the country at large.

A Professor of Economics, Prof. Peter Quartey, and an Economics Researcher, Dr Said Boakye, said in separate interviews yesterday that the country needed to change from that practice or risk collapsing the system in the long run.

The two professionals were speaking to the Daily Graphic after the launch of the manifestos of the NPP and the NDC, which the parties are now using to canvass for votes ahead of the December 7 general election.

Both Prof. Quartey, who is the Director of the Institute for Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon, and Dr Boakye, the Director of Research at the Institute for Fiscal Studies (IFS), declined to comment on the substance of the two manifestos.

They said until the manifestos were aligned to and anchored on a long-term development plan, the NPP and the NDC would continue to toy with the development aspirations of the country through promises that sought to win them power and not to entrench development.

They maintained that manifestos were not costed properly, whereas development plans are comprehensive programmes of action.

Context

On two occasions, the National Development Planning Commission (NDPC), which is legally mandated to plan the country's long-term development, developed long-term plans spanning 40 years and seven years.

However, those plans have been shelved by the counterparties, mainly on the basis of ideological disagreements.