Nana Addo Dankwa Akufo-Addo, elected President of Ghana in December 2016 and re-elected in December 2020, has led an administration built around flagship initiatives such as Free Senior High School, One District One Factory, and Planting for Food and Jobs. But alongside these achievements, his government has drawn sustained controversy. This examines ten cardinal sins of the Akufo-Addo administration.
SIN 1: BANKING SECTOR CLEAN-UP
The banking sector restructuring undertaken by the Akufo-Addo administration in 2018 remains one of its most consequential and divisive interventions. Proponents regard it as a necessary corrective to an undercapitalised and poorly supervised sector; critics view it as an overreach that destabilised segments of the country's financial system.
This decision was taken after a comprehensive review of the banking sector by the Bank of Ghana, which revealed that some of the banks were insolvent and posed a significant risk to the financial stability of the country. The Bank of Ghana revoked the licences of several banks, including UT Bank and Capital Bank, citing their failure to meet capital adequacy requirements. The decision unsettled confidence across the sector, triggering a wave of withdrawals by depositors at other institutions.
In response to the crisis, the BoG introduced a series of measures aimed at strengthening the banking sector, including raising the minimum capital requirement for banks from GHS 120 million to GHS 400 million. However, many banks were unable to meet this new requirement, and as a result, several of them were either merged or closed down.
The government's response to the crisis was to establish the Ghana Amalgamated Trust (GAT) to recapitalize some of the affected banks. The government capitalised GAT with GHS 800 million, and the Trust separately raised up to GHS 2 billion from pension funds and other investors through a bond programme, with the combined proceeds used to acquire equity stakes in banks struggling to meet the new capital requirement.
Critics of the government's approach have accused the administration of favoritism and lack of transparency in the banking sector restructuring process. Some have also criticized the government's decision to use taxpayer funds to bail out banks, arguing that it sets a bad precedent and rewards poor management practices.
The government claims that their action was aimed at restoring confidence in the banking sector, protecting the deposits of customers, and promoting the growth of the sector. However, implementation has been clouded by allegations that the process was used to target political opponents and to concentrate the sector under interests aligned with the government.
One of the major criticisms of the banking restructuring is that it was a strategy by the government to witch-hunt political opponents. The revocation of the licences of some of the banks has been linked to their affiliation with the previous government. Some have also accused the government of using the restructuring exercise to settle scores with political opponents and to silence critics.
A related concern is market concentration: the restructuring has left a small number of banks dominating the sector, raising concern that individuals with close ties to government, including Finance Minister Ken Ofori-Atta, could exert outsized influence over the financial system.
The banking crisis has had far-reaching consequences: reduced credit to the private sector, job losses from bank collapses, frozen customer assets, and a weakened sovereign credit rating that has made it harder to attract foreign investment and borrow internationally.
SIN 2: MORTGAGING THE COUNTRY’S FINANCIAL BUFFERS
A second cardinal sin of President Nana Akufo-Addo's administrationconcern is the administration's use of Ghana's dedicated revenue buffers, including the Energy Sector Levy Act (ESLA), the National Health Insurance Levy (NHIL), and Value Added Tax (VAT) receipts, as collateral for debt issuance. These levies were established to provide stable, ring-fenced financing for critical sectors such as health and energy.
In 2017, the government issued a $2.25 billion bond to finance the restructuring of the banking sector, with the bond backed by the ESLA, NHIL, and VAT. The bond was issued in three tranches, with the first tranche attracting a coupon rate of 19.75%, which is significantly higher than the market rate at the time.
Critics of the government's approach argue that the decision to use these buffers to back the bond was short-sighted and could have long-term consequences for Ghana's economy. They argue that the government has effectively mortgaged these buffers, which could limit its ability to respond to future financial crises or fund critical infrastructure projects.
The high coupon rate on the bond has led to concerns about the government's debt sustainability and its ability to service the debt in the long term. Ghana's debt-to-GDP ratio has been on the rise in recent years, and the high cost of servicing the bond could exacerbate the country's debt burden.
The government has defended its decision to issue the bond, arguing that it was necessary to save the banking sector and prevent a systemic financial crisis. However, critics argue that the government could have explored other financing options that would not have mortgaged Ghana's financial buffers.
SIN 3: DELAY AND CANCELLATION OF SOME ONGOING PROJECTS
A further concern is the administration's delay or cancellation of a number of infrastructure projects initiated under the previous Mahama government. These interruptions have set back development in areas the projects were designed to serve, from transport to healthcare access.
One of the most significant projects affected by the cancellation and delays was the Tema-Aflao road project, which was aimed at improving road infrastructure in the eastern part of the country. The project, which had already commenced, was stopped by the Akufo-Addo government in 2017, citing irregularities in the procurement process.
Other projects affected by the delays and cancellations include the Eastern Corridor Road project, the University of Ghana Medical Centre, and the Wa Regional Hospital project, among others.
The delays and cancellations of these projects have been a source of concern for many Ghanaians, with many questioning the government's commitment to the development of the country. Some have accused the government of being more interested in pursuing its own projects rather than completing projects initiated by the previous administration.
The delays and cancellations have led to cost overruns and wasted resources, as many of these projects had already received significant investment before being halted. The delay in the construction of critical infrastructure such as hospitals and roads has also had a negative impact on the lives of ordinary Ghanaians, particularly those living in rural areas.
In response to these criticisms, the government has defended its decision to delay and cancel some of the projects initiated by the previous administration, citing issues with the procurement process and the need to prioritize other projects.
SIN 4: HUGE GOVERNMENT SIZE, AND HIGH NUMBER OF FAMILY & FRIENDS IN GOVERNMENT
The size of Ghana's executive branch has long been debated. In 2017, President Akufo-Addo pledged a lean government; that commitment has not been borne out in practice, and the administration has faced sustained criticism for its scale and for the prevalence of family members and close associates in senior appointments.
The government's size has been a significant concern, with many critics pointing out that it is too large for a country like Ghana. According to a report by the International Monetary Fund, Ghana has one of the highest ratios of government employees to population in the world. The report also highlighted that the high number of government employees has contributed to the country's high wage bill and low productivity.
The government's size has also been linked to the high level of corruption in the country. The large number of government employees has created a breeding ground for corruption, with many officials using their positions to enrich themselves at the expense of the country.
A further concern is the appointment of relatives and close associates to senior government roles, including ministerial and ambassadorial positions, prompting allegations of nepotism. Notable appointments include the president's cousin, Ken Ofori-Atta, who serves as Minister of Finance, and his daughter, Gyankroma Funmi Akufo-Addo, who holds a role at the Office of the President.
The appointment of family and friends to key government positions has been a source of concern for many Ghanaians. Many see it as a violation of the principle of meritocracy and a reflection of the government's lack of commitment to transparency and accountability.
The high number of family and friends in government has also been linked to the government's inability to address the country's challenges effectively. Critics argue that the appointment of unqualified individuals to key government positions has led to a lack of competence and the inability to make meaningful progress in addressing the country's challenges. They argue that such appointments could lead to conflicts of interest and undermine public confidence in the government.
Restoring public confidence will require the government to shrink its footprint, hire on merit, and bring a wider diversity of perspectives into policymaking.
SIN 5: EXCESSIVE BORROWING
Since taking office in 2017, the Akufo-Addo administration has been accused of borrowing without adequate fiscal planning, contributing to a sharp deterioration in Ghana's debt profile and raising sustained questions about debt sustainability.
The government's excessive borrowing has been attributed to its ambitious infrastructure development agenda, which includes building roads, hospitals, schools, and other infrastructure projects across the country. While the government's infrastructure development plans are laudable, the borrowing to finance these projects has been without proper planning, leading to a debt crisis.
According to the Bank of Ghana, the country's total public debt stock as of September 2021 stood at approximately GH¢341.7 billion, representing about 77.5% of Ghana's Gross Domestic Product (GDP). This debt burden has led to the country seeking debt restructuring programs and IMF support for its fiscal policies.
One of the major concerns with the government's borrowing habits is the lack of transparency in how the borrowed funds are being used. Critics argue that the government is borrowing without any clear plans or accountability mechanisms in place, leading to concerns about the potential misuse of these funds.
The excessive borrowing has also led to concerns about Ghana's ability to repay its debts. With the high-interest rates on the borrowed funds, the country may struggle to meet its repayment obligations, leading to a debt crisis that could affect the country's economic stability.
The government's excessive borrowing has also been linked to the country's inability to attract foreign investments. With the high debt burden, investors may be hesitant to invest in the country, leading to a slowdown in economic growth.
It is realistic for the government to be more transparent in its borrowing and spending habits and take steps to attract foreign investments to support its infrastructure development agenda without compromising the country's economic stability.
SIN 6: THE NATIONAL CATHEDRAL.
A sixth concern is the construction of the National Cathedral. Announced in 2018 as a national unity project and place of worship, the cathedral is sited on prime state-owned land in Accra currently occupied by government institutions and residences. Estimated to cost approximately $100 million, the project has drawn a mixed public response.
One of the main criticisms of the National Cathedral project is that it is not a priority for the country, especially given the numerous challenges facing the nation such as high levels of unemployment, poverty, and inadequate infrastructure. Some have also argued that the funds allocated for the project could be better used to address some of these pressing issues.
Another criticism is that the government did not carry out adequate consultation with citizens before embarking on the project. The decision to use public funds for the construction of a religious edifice has also been questioned by some, who argue that it goes against the principles of a secular state.
The project has been controversial due to the fact that it involves the demolition of some state institutions and residences. The displacement of people and the disruption of government activities have raised concerns about the project's impact on individuals and the economy.
The project has been criticized for its lack of transparency, with some questioning the procurement process and the involvement of a religious organization in a government-led initiative.
The National Cathedral project remains one of the administration's most contested undertakings, with critics questioning both the allocation of public funds to a religious structure amid pressing economic needs, and the transparency of the process by which it has been pursued.
SIN 7: AGGRESSIVE IMPLEMENTATION OF FREE SENIOR HIGH SCHOOL POLICY
The Free Senior High School (SHS) policy, launched in September 2017, is among the administration's flagship reforms, aimed at extending free secondary education to all Ghanaian students. While praised for expanding access, its rapid rollout has drawn sustained criticism for the strain it has placed on the system.
One of the most significant challenges created by the policy's aggressive implementation has been overcrowded classrooms. As more students are now able to attend senior high school without having to pay tuition fees, the number of students in classrooms has increased significantly. This has resulted in overcrowding, which makes it difficult for teachers to deliver quality instruction and for students to learn effectively.
In addition to overcrowding, the implementation of the Free SHS policy has also resulted in inadequate infrastructure. The sudden influx of students into senior high schools has put pressure on the already limited infrastructure, leading to a shortage of classrooms, dormitories, and other facilities. This has made it difficult for schools to accommodate all the students who have been admitted under the policy, resulting in some students being forced to study under trees or in makeshift structures.
Another challenge created by the aggressive implementation of the Free SHS policy has been the lack of teaching and learning materials. Many senior high schools in Ghana do not have enough textbooks, laboratory equipment, or other materials necessary for effective teaching and learning. The sudden increase in the number of students has only exacerbated this problem, making it difficult for teachers to provide quality education.
Also, the aggressive implementation of the Free SHS policy has resulted in inadequate funding. The policy was launched without proper planning and budgeting, which has led to a shortage of funds to support its implementation. This has made it difficult for schools to hire enough teachers, provide adequate infrastructure and teaching materials, and offer quality education to students.
Another major challenge created by the policy's aggressive implementation has been poor nutrition. Many senior high school students in Ghana come from low-income families and may not have adequate food supplies from home to supplement school meals when needed. The government's failure to adequately fund the feeding program for Free SHS students has resulted in some students going hungry, which affects their ability to concentrate in class and perform well academically.
The rapid expansion in enrolment has also coincided with a rise in student indiscipline and substance abuse, straining schools' capacity to maintain a safe learning environment and undermining teachers' ability to enforce discipline.
The policy's promise of universal access is real, but its rushed rollout has left schools under-resourced and overstretched, the government must slow down and fund implementation properly.
SIN 8: THE ISSUE OF ILLEGAL MINING (GALAMSEY)
Illegal mining, known locally as galamsey, involves the extraction of gold and other minerals without the requisite permits or licences. It has proven intractable across successive Ghanaian governments, driving deforestation, soil erosion, and water pollution, while depriving the state of tax and royalty revenue. Despite repeated enforcement efforts, the problem persists under the Akufo-Addo administration, which has also faced allegations that senior officials are themselves implicated.
The Akufo-Addo administration came into power in 2017 with a promise to clamp down on illegal mining activities in the country. The government launched Operation Vanguard, a joint military-police task force aimed at combating illegal mining activities. The government also imposed a ban on small-scale mining in the country to allow for a comprehensive review of the sector.
Despite the government's efforts, the problem of illegal mining persists in Ghana. The issue came to the fore in 2019 when the investigative journalist, Anas Aremeyaw Anas, released an exposé on illegal mining activities in the country. The exposé, named the ‘Galamsey Economy’, alleged the involvement of top government officials in illegal mining activities.
The Akufo-Addo administration has been criticized for its handling of the galamsey menace. The government's failure to effectively clamp down on illegal mining activities has been attributed to several factors, including corruption, weak enforcement mechanisms, and lack of political will.
One of the cardinal sins of the Akufo-Addo administration regarding the issue of illegal mining is corruption. The government has been accused of turning a blind eye to illegal mining activities due to the involvement of top government officials in the activity. The exposé by Anas Aremeyaw Anas alleged that some government officials were receiving bribes from illegal miners in exchange for protection and access to mining concessions.
Another factor contributing to the persistence of illegal mining activities in Ghana is the weak enforcement mechanisms. Although the government has launched several initiatives aimed at clamping down on illegal mining activities, enforcement of the laws and regulations governing the sector remains weak. The lack of effective enforcement mechanisms has allowed illegal miners to continue their activities with impunity, despite the government's efforts to stop them.
The government's lack of political will to tackle the issue of illegal mining is another cardinal sin of the Akufo-Addo administration. The government's commitment to fighting illegal mining activities has been called into question due to the involvement of top government officials in the activity. The government's failure to take decisive action against illegal mining activities has led to a situation where the problem continues to persist, leading to environmental degradation and loss of revenue for the country.
SIN 9: HIGH ALLOCATION OF FUNDS TO THE OFFICE OF THE PRESIDENT
The administration has faced sustained criticism over the scale of budgetary allocation to the Office of the President, including its frequent use of chartered aircraft for foreign travel, prompting accusations of misallocated spending at a time of acute fiscal pressure.
According to reports, the Office of the President was allocated a budget of GHS 1.5 billion (approximately USD 258 million) for the 2021 fiscal year, which is significantly higher than the budgets of some key ministries and agencies. This has raised concerns about the priorities of the government and its commitment to fiscal discipline and accountability.
In addition, the frequent use of private jets by the President for foreign travel has also attracted criticism. The President has been accused of spending too much on such trips, particularly when commercial flights could be used at a fraction of the cost. This has led to calls for more transparency and accountability in the use of public funds, particularly in relation to the President's foreign travel.
The issue of the President's use of private jets for foreign travel was recently brought to the fore by Hon. Samuel Okudzeto Ablakwa, the Member of Parliament for North Tongu. Ablakwa, who is a ranking member of the Foreign Affairs Committee of Parliament, alleged that the President had hired a private jet for his recent trip to France, at a cost of GHS 2.8 million (approximately USD 485,000).
The allegations drew significant public criticism and prompted debate in Parliament, where some members called for a formal investigation.
In response to the criticism, the government has defended its spending on the Office of the President and the President's foreign travel. It has argued that the President's foreign trips are necessary for promoting Ghana's interests and attracting foreign investment, and that the use of private jets is sometimes necessary for security reasons.
However, critics have dismissed these justifications as insufficient and have called for more accountability and transparency in the use of public funds. They argue that the government should prioritize spending on critical sectors such as health, education, and infrastructure, rather than on the Office of the President and the President's foreign travel.
SIN 10: HIGH TAX REGIME
A tenth and final concern is the tax regime introduced under the administration's revenue-mobilisation drive. Alongside genuine policy achievements, including Free SHS and One District, One Factory, the government's tax measures have drawn some of the sharpest criticism of its tenure.
Since coming into power, the government has implemented several taxes, including an increase in Value Added Tax (VAT), the introduction of the COVID-19 Health Recovery Levy, and the proposed Electronic Transaction Levy (e-levy) on mobile money transactions. The government has also introduced a tax on betting, which has been heavily criticized by the public.
While the government has argued that these taxes are necessary to raise revenue for development projects, the high tax regime has put significant pressure on businesses and taxpayers. The introduction of these taxes has led to the relocation of some businesses and companies to neighboring countries, as the high tax rates make it difficult for them to operate profitably in Ghana. This has led to an increasing collapse of businesses, which will ultimately lead to unemployment and other economic challenges.
Furthermore, the introduction of these taxes has put a significant burden on the ordinary Ghanaian, as prices of goods and services have increased. The cost of living has become unbearable for many Ghanaians, leading to public outcry and protests against the government's policies.
The government's high tax regime has also had a negative impact on the country's economy, as it has led to a decline in foreign investment. This is because investors are wary of investing in a country with a high tax regime, as it makes it difficult for them to make a profit.
Development needs revenue, but a tax regime that drives businesses out and investors away is self-defeating; the government must recalibrate.
Taken together, these ten sins, from the banking clean-up to the tax burden, reflect a pattern of decisions made without enough transparency or accountability. Addressing them will take more than rhetoric: it requires genuine engagement with stakeholders and civil society, and a demonstrated commitment to course-correct. Only then can public confidence in government be restored.
I do not have any political bias or affiliations. Nonetheless, I would like to propose some general suggestions that might aid in revitalizing Ghana's economy:
1. Diversify the economy: Ghana is largely dependent on the export of raw materials, which exposes the economy to external shocks. The government should focus on developing other sectors such as tourism, manufacturing, and services.
2. Implement targeted policies to support small and medium-sized businesses: SMEs are the engine of growth in any economy, and Ghana is no exception. The government should provide targeted support such as tax incentives, access to credit, and training programs to help SMEs grow.
3. Prioritize infrastructure development: Good infrastructure is essential for economic growth. The government should prioritize the development of roads, railways, airports, and other essential infrastructure to improve connectivity and facilitate trade.
4. Tackle corruption: Corruption is a major barrier to economic growth. The government should take strong measures to tackle corruption, including prosecuting corrupt officials and implementing transparency measures.
5. Encourage foreign investment: Foreign investment can bring in capital, technology, and expertise, which can help spur economic growth. The government should create a conducive environment for foreign investment, including streamlining business regulations and reducing bureaucratic red tape.
6. Focus on human capital development: Investing in education, healthcare, and skills development can help improve the quality of the workforce and increase productivity. The government should prioritize human capital development as a key component of economic growth.
7. Implement sustainable policies: Sustainable policies that protect the environment and natural resources can help ensure long-term economic growth. The government should implement policies that promote sustainable development, including renewable energy and responsible resource extraction.
HASHTAGS:
#CardinalSinsOfPresidentAddo #GhanaPolitics #GovernmentFailings #EconomicIssues #CorruptionConcerns #PolicyMistakes #NationalCathedralControversy #FreeSHSPolicy #GalamseyIssues #HighGovernmentSpending #TaxationChallenges #RestoringGhanaEconomy #GhanaPolitics #PresidentAddo #GovernmentSins #CardinalSins #EconomicChallenges #NationalCathedral #FreeSHSPolicy #IllegalMining #GovernmentSize #HighTaxRegime #EconomyRestoration #ghana #ghanaian
Comments
Post a Comment