Ghana: Ghanaian President Gives Maiden State Of The Nation Address

In fulfilment of Article 67 of the Constitution, Ghanaian President Nana Akufo-Addo presented his maiden State of the Nation address to parliament on 21stFebruary, 2017.1 The president painted a gloomy picture of the economy inherited from the erstwhile National Democratic Congress (NDC) government: characterised by estimated real GDP growth of only 3.6% per annum in 2016 – the lowest in 23 years; high fiscal and current account deficits, ballooning public debt, double digit inflation and elevated interest rates.

Economy

Since the restoration of multiparty democracy, election year overspend has been a signature feature of the political cycle with few exceptions. Nevertheless, 2016 slippages stand out on two fronts at least: their quantum and timing.

  • The budget deficit is estimated to have reached 10.2% of GDP, as against a target of 5.3%; public debt has crept back up to USD27 billion or 74% of GDP, and a forensic audit by the finance ministry has revealed a GHS7 billion (USD1.5 bil.) expenditure gap.
  • This is in the midst of an ongoing IMF programme (a three year Extended Credit Facility aiming at the restoration of macroeconomic stability and public debt sustainability whilst maintaining social spending2.

President Akuffo-Addo made reference to the missed IMF targets in his address. But on policy measures, it laid emphasis on plans to reduce tax and interest rates, provide stimulus packages for local industries and ensure adequate power supply. The popular one-district, one-factory policy according to the president will be implemented through Public Private Partnerships (PPP). However, the government has begun negotiations for the extension of the IMF programme from its scheduled April 2018 deadline to December 2018. Between this and the strained fiscal context on the one hand, and the above pledges of government largesse on the other, there may be some tension.Finance Minister Ken Ofori Atta is expected in parliament on March 2 to present the budget and economic policy.

Energy

One key area addressed by Akufo-Addo was the energy sector. As it stands, Ghana has an installed capacity of 3,644MW of which 3,275MW is classed as 'reliable'3. dumsor4 has been reduced in recent months and output is expected to be boosted over the next 12-18 months by (a) the TEN oil and gas field ramping up to full production5 and (b) the Sankofa field producing its first gas in 20186.

Nevertheless, in his address Akufo-Addo bemoaned the debt-addled nature of the industry and put the net debt at US$2.4 billion, of which US$800 million is owed to local banks putting additional strain on the domestic banking industry. Incoming olicy prescriptions signalled by the president include:

  • A review of all the power agreements that were signed by the previous Mahama-led government
  • Instituting an "open and competitive bidding for power and capacity procurement going forward.7"
  • Exploring the benefits of listing the Volta River Authority (VRA) and GRIDCO on the Ghana Stock Exchange.8
  • Improving the transparency around how tariffs are set and reclassifying categories of consumers

The president also intimated that deeper consultations will be held in anticipation of the Millennium Challenge Account (MCA) Compact 2 activity9. The US government programme includes commitment to USD500 million investment into the power sector over 5 years but has become controversial due to associated plans for concessioning management of the distributor, Electricity Company of Ghana (ECG). See Public Utility Workers Union (PUWU) protest10.

Agriculture



Agriculture remains a significant source of employment but has seen its share of GDP fall dramatically since the 1990s. In outlining his plans for the transformation of the sector, Akufo-Addo revealed that a CA$125 million (US$95 m) agreement has been signed with the government of Canada to launch a project dubbed "Planting for Food and Jobs."

The project aims to provide investment focusing on irrigation, extension services, fertilisers and e-agriculture. Akufo-Addo had earlier stated that agriculture provides the best opportunity to use modern methods to change the lives of many within the shortest possible time." Agriculture Minister Dr Owusu Afriyie Akoto, later added that the initiative will directly affect 200,000 farmers in each of the 216 administrative districts of the country and has the potential to provide up to 750,000 jobs.11

The introduction of modern methods is an effort to both appeal to potential young farmers and move the country away from subsistence farming and towards planned, large-scale industrial agricultural production.

Corruption

Ghana scored 48 out of 100 in Transparency International's 2014 corruption perceptions index (CPI). In 2015, it was 47 and in 2016, 43. This deterioration has coincided with anaemic macroeconomic indicators touched on above and a steady feed of corruption scandals. Among them: contracts awarded to party members/sympathisers without going through the appropriate procurement process12; inflated contracts13; large scale corruption in the judicial service14 and continued contract abrogation leading to judgement debts15.

Unsurprisingly therefore, governance was a key issue on the campaign trails of all political parties ahead of the December 2016 elections. The NPP, which eventually won the presidency and control of parliament, pledged to create a Special Prosecutor office "independent of the Executive, to investigate and prosecute certain categories of cases and allegations of corruption and other criminal wrongdoing, including those involving alleged violations of the Public Procurement Act and cases implicating political officeholders and politicians". Principal concerns surround those plans:

  • It is not clear how the powers of a Special Prosecutor would sit alongside that of the Attorney General, who under the constitution is responsible for the initiation and conduct of all prosecutions of criminal offences. However, the Constitution does appear to allow for the Attorney General to delegate some of those powers.
  • The rumour mill points to one Akoto "Sheshe" Ampaw as the likely Special Prosecutor nominee. In addition to being a well reputed lawyer, Mr Ampaw is a partner in the president's law firm, Akufo-Addo, Prempeh & Co.

President Nana Addo Dankwa Akufo Addo addressed the first concern to a degree. Simply stating that bill for the creation of an Office of the Special Prosecutor, in keeping with the Constitution, would be introduced. He did not touch on the second.

Outlook

Akufo-Addo's maiden state of the nation address clearly labels the economic challenges of the moment. A large, above expectation, fiscal deficit; elevated public debt; weak economic growth and job creation; sticky inflation and current account imbalance. However, there is a potential contradiction between those constraints and some of the expansionary policy responses flagged in the 2017 State of the Nation. The budget is scheduled for 2 March. Sorely anticipated detail therein will shed light on how the government intends to resolve those difficulties. Scheduling will be key. As will the degree of private sector participation and measures to ensure transparency. The creation of Office of the Special Prosecutor gets the government around having to separate the Minister of Justice and Attorney General functions – a promise of NPP and NDC alike when out of government; quickly forgotten once the levers of power change hands. But the independence of the function, and the appearance of independence, are crucial details. Appointment by the president, of a business partner of the president, to that role could undermine both potentially.

Footnotes

[1] http://presidency.gov.gh/index.php/2017/02/21/state-of-the-nation-address-by-the-president-nana-addo-dankwa-akufo-addo/

[2] http://www.mofep.gov.gh/sites/default/files/news/BRIEF%20ON%20IMF%20PROGRAMME.pdf

[3] http://www.vra.com/resources/facts.php

[4] loadshedding

[5] http://www.tullowoil.com/operations/west-africa/ghana/ten-field

[6] https://www.eni.com/enipedia/en_IT/international-presence/africa/enis-activities-in-ghana.page

[7] http://www.ghanaweb.com/GhanaHomePage/NewsArchive/FULL-TEXT-President-Akufo-Addo-s-first-state-of-the-nation-address-512281

[8] http://citifmonline.com/2017/02/21/vra-gridco-to-be-listed-on-the-gse-nana-addo/

[9] https://www.mcc.gov/where-we-work/country/ghana

[10] http://www.myjoyonline.com/news/2017/January-24th/ecg-compact-deeper-consultant-vital-agyarko.php

[11] http://citifmonline.com/2017/02/21/govt-to-turnaround-agric-sector-with-125-million-dollars/

[12] http://www.myjoyonline.com/news/2016/May-9th/explosive-expos-on-smarttys-bus-branding-deal-by-occupyghana.php

[13] http://citifmonline.com/2015/12/14/aceps-full-statement-on-ameri-power-deal/

[14] http://www.graphic.com.gh/news/general-news/judicial-bribery-scandal-20-lower-court-judges-dismissed.html

[15] http://pulse.com.gh/news/judgement-debt-ghana-will-pay-me-more-money-before-my-case-ends-woyome-id5780126.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.