As Ghana moves gradually towards its presidential election in December, the polls will be taking place against a backdrop of serious economic hardship. Owing to the COVID pandemic, conditions imposed by the ongoing Russia-Ukraine war and insufficient monetary and fiscal discipline, Ghanaians have faced rapid inflation. The resulting debt has required an emergency $3-billion IMF bailout, which has sent the NPP on a desperate race to defend its decision to borrow.
Given the tightness of recent elections and the parity in the country’s parliament—with each party fielding 137 representatives—the upcoming elections are expected to be highly competitive.
Current events already reveal what is shaping up to be a tight race between Vice-President Mahamudu Bawumia of the ruling New Patriotic Party (NPP) and former President John Mahama of the National Democratic Congress (NDC). Beyond the intrigues that saw the country’s former Trade Minister, Alan Kyerematen, a senior NPP member, walk out of the party in protest, following Akufo-Addo’s support for Bawumia to win the race for the party’s nomination last November, the party has also had to acknowledge that its poor handling of the economy presents a major challenge at the polls.
Key political observers have said that the NPP government may face an uphill task in securing a victory at the polls if it does not take key steps to change the current economic circumstances.
Since 2022, Ghana’s total debt surged to $55 billion. This meant the government needed in excess of 70% of its income to service the debt, a condition it could not meet. It subsequently defaulted on much of its debt payments. This situation saw the country’s inflation, driven by food prices, rise to 40.1% in August 2023. As a result, Ghanaian households have been under pressure from high inflation and slowing economic growth.
Recent figures show this is easing up. According to the Ghana Statistical Service, in 2023, Ghana’s annual inflation rate eased to 23.2% in December, compared to 26.4% in November. It was the lowest reading since March 2022 but still well above the central bank’s target band of 15%. Prices slowed down for both food and non-food items.
Economists say that the Ghanaian economy may be showing signs of stabilisation, thanks to the authorities’ steadfast implementation of its IMF-supported economic program, which aims to restore macroeconomic stability, secure debt sustainability, and lay the foundations for higher and more inclusive growth.
They also say domestic inflation will continue to fall, from the previous extremely high levels of 35.2% in October 2023. However, they predict, the government’s end of 2024 target of 15% is a stretch, even with the Bank of Ghana-set policy interest rate of 30%. The central bank will remain under scrutiny, its credibility still damaged by last year’s uproar over the state of its balance sheet.
Another sector that the Akufo-Addo government is believed to have mishandled is the country’s power sector. Analysts say Irregular power supply in major cities and towns is likely to worsen in 2024 if the ruling government is unable to settle its ever-growing debt to Independent Power Producers (IPPs).
In December, it was reported that Sunon Asogli Power (Ghana) Limited suspended its indefinite shutdown of its 560MW power plant following the assurance of Ofori-Atta that a debt of about $1.5bn owed Asogli will be paid in tranches. It is estimated that the total sector debt owed to IPPs (excluding Asogli) ranges between $2.3 billion and $2.4 billion.
Mahama has blamed the country’s economic difficulties on excessive borrowing by the Nana Akufo-Addo government, ill-advised public spending, and corruption.
There are predictions that the current challenges of unemployment, rising food costs and corruption in government may swing the votes former president Mahama’s way.
However, some say, he appears to lack strategic ideas on how to address the country’s major socioeconomic problems and measures to transform the ailing economy. He has focused on a ‘24-hour economy’ proposal which some academics and civil society leaders have dismissed as unrealistic.
In spite of these opinions, two UK-based firms, The Economist Intelligence Unit (EIU) and Fitch Solutions have predicted victory for former President John Mahama in the 2024 presidential elections.
According to the EIU, Ghana is likely to experience a transfer of power from the ruling (NPP) to the opposition (NDC), largely driven by declining living standards, limited job opportunities, and poor public services.
Fitch Solutions, on the other hand, focuses on how the elections will play out across the country and predicts that Mahama may win the swing regions against Bawumia.
A Bar Chart presented by the UK-based firm shows that the former President will win the five northern regions by nearly 60% as against a little above 30% by the Vice President. In the swing regions which include the Greater Accra and Central regions, the former President is expected to get about 47% of the votes, whilst Dr. Bawumia will get nearly 30%. In the Akan regions including Ashanti and Eastern regions, President Mahama is also ahead with about 34% as against Dr. Bawumia’s 33%.
The challenge goes beyond the economic downturn. There are also criticisms of the government’s suppression of political opponents within its ranks that threatens to further limit its reach in the campaigns. A report by an anonymous source said that “Kyerematen, Bawumia’s biggest rival for the nomination, withdrew from the New Patriotic Party (NPP) race in September, citing ‘intimidation… unleashed on a significant number of delegates’ during the electoral college vote”.
Kyerematen has since launched a breakaway party which many believe could attract support from disaffected voters in Greater Accra, Asante, and Central regions, areas where he has popular support from his Akan kinsmen. The report also noted that Kyerematen would need to win around 2% of the national vote to push the election into a second round.
Ghana has had three peaceful transfers of power between the NPP and the opposition NDC in 2000, 2008 and 2016. That pattern, and the Akufo-Addo-government’s difficulties in addressing key social and economic challenges, leading to a loss of goodwill among swing voters, may favour Mahama, observers say.
Also, public disaffection over rising corruption would likely further split the ruling party’s support base. There may also be a split along ethnic lines, which may further impede the NPP’s political advantage.
Many Ghanaians say Bawumia, a Muslim from the North of the country– would have to go the extra mile in convincing his own party members, known to be predominantly Akan, that he would not be sectional in his political leadership and would build a united bloc within the party that would claim parts of the opposition party’s base.
Political watchers have said that if he is able to secure strong backing from his party’s leadership, he may not alienate significant numbers of his party’s Akan and Christian base.
Some pundits maintain that Bawumia and the NPP could still pull a surprise at the polls if the NDC cannot get its own ‘Akan heartland’ strategy in order.
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.