President-elect of Ghana, Nana Akufo-Addo. Photo Credit: Reuters
Ghana’s President-elect Nana Akufo-Addo needs to act fast to deliver on his campaign promise to create jobs, restore rapid growth, build a dam in every village and a factory in every district if he is to satisfy an electorate eager for change.
Voters gave President John Mahama just one four-year term before they wielded the ax, rejecting him in an election on Wednesday that cemented Ghana’s reputation for democratic accountability in a region scarred by civil wars and coups.
“If in three years they (the New Patriotic Party) haven’t created enough jobs they could face the same voter backlash that Mahama faced,” pollster and newspaper publisher Ben Ephson told Reuters.
Falls in prices for Ghana’s gold, cocoa and oil exports helped sink Mahama. The country is emerging from a fiscal crisis of elevated inflation and debt under the supervision of an International Monetary Fund (IMF) program.
But new oil and gas is set to come onstream in 2017 and 2018 from a $7.9 billion offshore field being developed by Italy’s ENI which the government says will boost revenue and aid longstanding domestic power problems.
At the same time, a recovery in gold prices in the past year should help Ghana’s major gold producers who include Newmont, while cocoa farmers say they are hoping for a strong 2016-17 crop.
In a victory speech on Friday, Akufo-Addo, a former foreign minister, acknowledged the pressure to deliver for impatient voters.
“I make this solemn pledge to you tonight: I will not let you down. I will do all in my power to live up to your hopes and expectations,” he said.
FRESH SCRUTINY
His New Patriotic Party (NPP) supports the IMF program and says it will manage national finances more tightly than the outgoing government.
But it could face a nasty surprise when it takes office early next year if it turns out budget deficit reduction targets have been missed, economists said.
This is possible because Mahama cut the ribbon on some big-ticket infrastructure projects during the election campaign, suggesting increased spending. At the same time, revenue from the Jubilee offshore field operated by British company Tullow dipped in 2016 due to a technical fault on its oil ship.
Even so, they said there is little chance the new government will face the scale of fiscal problems that emerged after the last election when the fiscal deficit jumped to over 11 percent.
“What we know is that there has been a stepped up effort of fiscal consolidation. What we don’t know is how much arrears have crept up due to the decline in oil production,” said Razia Khan, head of Africa Research at Standard Chartered.
Some business leaders say they are nervous that the new government will want to scrutinise existing contracts. In particular, senior advisers to the NPP have criticised the ENI deal, arguing that Ghana will overpay for its gas.
Even if business leaders do not have to renegotiate contracts, they say government decision-making will be on hold while a new team is put in place, and then they will have to forge relationships with a fresh administration.
“There is an inevitable slowing down any time a new government takes over,” said one business executive who declined to be identified.
Source: Reuters
