Once upon a time, the Gold Coast (currently Ghana) comprised several tribes and kingdoms, which coexisted and interacted through an elaborate system of trade and diplomacy, and despite hosting a poorer economic region than our prospective colonial master back then, we had our liberty; our traditional leaders made the decisions after doing their ‘own thinking’ without any duress or external control. Then came the British, who through a combination of craftiness and gun powder, managed to subjugate the Gold Coast. After a long period of exploitation from our colonizers, some of the educated natives decided to retaliate and restore the system of self-rule. Nevertheless, the British, as well as other European masters, had thought light years ahead and discovered that they need not be in their colonies to rule them, but they could create a better system of master-slave manipulation and exploitation from afar, a situation which prompted a school of thought to conjecture the dependency theory.
Since 1967 to date, Ghana seeking aid from international financial bodies, especially the IMF, hasn’t been something that is new to the country. These include programs in 1967, 1972, 1983, 1999, 2001, and 2009. The IMF program with Ghana between 2009 and 2012 was a programme called Highly Indebted Poor Countries initiative under the former NPP administration in 2001. HIPC sought to provide debt relief to cash-strapped countries based on the implementation of poverty alleviation strategies prescribed by the IMF and the World Bank. After Ghana exited the HIPC programme, it became a lower middle income country. The most recent encounter with the IMF was 2015. After the 2015 bailout which came with its conditions (including cutting down the number of jobbs in the public sector), the country hasn’t got any better. Just recently, there had been rumours that the country was to be put on the HIPC programme again because the country’s debt to GDP ratio is currently around 65-75%.
With respect to these rumours, The Daily Graphic, sought to find out whether the IMF would consider advising Ghana to consider a HIPC debt relief but the IMF answered that Ghana had already had its chance and could not do so again. These events and occurrences show how Ghana still relies on western countries(or former colonial masters) and institutions even after we have had political independence.
We concur with the dependency school of thought that infrastructure and the administration of our public institutions remain our key challenge, but the current state of the economy of Ghana presents a bit of a dilemma with respect to the our next move to generate the needed capital. There is a possibility of getting revenue from taxes, but the government has failed to establish a system to effectively collect taxes from the informal sector, which contributes to about 88% of the workforce. The country is replete with natural resources like gold ores and crude oil, but those have been donated to some of our creditors, so we stick with cocoa, which is still inadequate to support government expenditure. This affords us only one option: to borrow more from international financial institutions i.e. IMF and World Bank…and we all know by now that there is no such thing as a free lunch in this world.
So we ask ourselves, can the economy of Ghana survive for 10 years, there will be no IMF bailout?
Written by Ayishetu Seidu and Norbert Sackey