Economy will be election battleground: Ghanaians go to the polls on December 7. The main rivalry will be between the ruling NPP led by President John Kufuor and the NDC, led by John Mills. Both have based their campaigns on the state of the economy. George Frank Asmah reports from Accra.

Six political parties will contest the Ghanaian elections but the major battle will be between the New Patriotic Party (NPP) led by President John Agyekum Kufuor and the National Democratic Congress (NDC), formed by former head of state Jerry Rawlings and led by John Evans Atta Mills. The NDC, currently the largest opposition party, ruled the country for eight consecutive years before it was defeated at the 2000 polls by the NPP. John Mills was vice-president when Jerry Rawlings was head of state.

Both the NPP and the NDC have set ambitious economic programmes in their 2004 manifestoes and both have pledged to implement their plans to the letter once they are in government.

"The NPP government is committed to pursue, in its second term, the fiscal/monetary policy framework that has brought Ghana this far," says the minister of finance and economic planning, Yaw Osafo-Maafo.

When the NPP government assumed office on January 7, 2001, Ghana's economy was in serious crisis. Excessive government expenditures in the run-up to the 2000 elections had led the economy into a vicious cycle of high inflation and currency depreciation.

The situation coincided with a sharp deterioration in the external market prices of Ghana's major exports of cocoa and gold. In just one year, ending December 2000, the national currency virtually collapsed, losing 50% of its value against the US dollar. Ghana's international reserves were also so depleted that they could hardly cover a month's imports, whilst external payments arrears were also building up.

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Inflation was running at 41% and the budget deficit had increased whilst both the external and domestic debts stood at levels which could not be sustained. External debt servicing alone accounted for 24% of total government expenditure in 2000.

A major consequence of this state of affairs was not only to sacrifice economic growth but also to drastically reduce social and poverty-related spending. For example, the external debt service expenditure of cents2,454.6bn was almost twice the budgeted social service sector allocation of cents1,370bn for the year 2000. Most of the ongoing social sector and pro-poor projects had ground to a halt. (Currently cedi 9,000 = $1; in 2000, cedi 18,000 = $1).

Today, the NPP government boasts of "a dramatically much better economy" than at the end of 2000. "Following the implementation of prudent fiscal and monetary measures by my government since 2001, Ghana has achieved a fairly stable macroeconomic environment and has also made a robust recovery of GDP growth from 3.7% in 2000 to 5.2% in 2003," says President Kufuor.

The government's discipline over its expenditures has also resulted in much less borrowing through the Treasury Bill system. It has also helped to lower interest rates whilst increased foreign exchange inflows from buoyant cocoa and gold exports--as well as personal remittances--has led to a build-up of Ghana's international reserves to more than four months of import cover. The macro-economic policies have so far been supportive of business in the country.

Ghana's development partners and external donor states have also acknowledged the progressive trend in its economic growth. John B. Taylor, the US under-secretary of international affairs, led a team to Ghana in June this year to assess the state of the country's economy, including the impact of HIPC. "We are impressed," Taylor said, "with Ghana's democracy and government's policies on governance, education, health and freedom of the press. We are also impressed to see inflation down."

Recently, Ghana was chosen as one of the 16 beneficiaries of the first $1bn tranche from the US Millennium Challenge Account. The strict and transparent selection process computed a number of economic, social and political indices, including the degrees to which a government was believed to be 'ruling justly', 'investing in its people' and 'establishing economic freedom'.

Other factors taken into account included the percentage of the country's GDP that was spent on primary education and health as well as detailed performance criteria such as the primary school dropout rate and the coverage of mass immunisation schemes for diphtheria, polio, tetanus and measles. Ghana now spends 2.5% of GDP on health and 3.36% on primary education. Inflation now stands at 11%.

Ghana recently achieved 'completion point' of the painful HIPC initiative process. The upshot is that $3.5bn of the country's $6.1bn foreign debt will be written off by creditors over a period of 20 years. Indeed, in July $1.6bn out of a total of $1.9bn owed to 14 Paris Club creditors was immediately cancelled and the money is now being used for development projects.

The original decision to take the HIPC route in 2001 generated a heated national debate between the government and the opposition parties. Today, Osafo-Maafo tells his opponents: "We were right and you were wrong. This bold decision was driven by our deep appreciation of the expected positive results which we foresaw."

Under normal rules, HIPC relief must be targeted at the social sector and poverty-related reduction programmes. "But we in Ghana, went and argued with the IMF and the World Bank and said we should be allowed to use 20% of the HIPC resources to pay our domestic debt, so that interest rates would come down, and if interest rates come down, who benefits? The private sector," says Osafo-Maafo, adding: "HIPC resources should also intervene in areas that create employment, thus, we have handled HIPC relief differently."

Ghana's minister of information, Nana Akomea, says: "Now that the completion point has been reached, the ratio of Ghana's total debt to its annual domestic revenue will fall from 570% to below 250% whilst the ratio of its total debt to annual export-revenue will fall from 157% to below 100%."

When he visited Ghana in March this year, Hilary Benn, British secretary of state for international development, said: "Ghana has made good use of the additional resources which were freed up by the reduction in debt repayment. Now Ghana has an opportunity to go further and faster with its development plans."

NOT RESTING ON LAURELS

President Kufuor, however, refuses to rest on his laurels. He says: "I believe if we keep the pace at which we've been growing, continue to show sensitivity to the people and continue doing the good work within the priorities we've set ourselves, the people will elect us for another four-year-term to continue the good work of improving the lives of our people."

For President Kufuor, the biblical injunction that says people must be judged by their works, is applicable to politics and economics too. "Judge me by my works," he readily declares on rally platforms.

But Kufuor reckons that the mandate to rule Ghana for two consecutive terms is not going to come easily. He says: "Given the long suffering and deprivation with which the nation came to elect my government in 2000, it should be accepted as natural for many Ghanaians to expect a quick turnaround of the economy."

Many Ghanaians still complain of economic hardship despite the widely acclaimed good macroeconomic indicators.

Although the opposition parties, particularly the NDC, are intensifying their campaign to unseat the NPP from power, most political and economic analysts believe that the NPP will win the December elections to continue building on political and economic foundations laid. Many reasons have been put forward to explain why voters will re-elect the party.

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The People's Assembly, which was first held on January 7, 2002, allows President Kufuor to submit himself to a cross-section of the populace to be subjected to questions, comments and criticisms. The People's Assembly has become an annual affair and is replicated in all the 10 regions of the country and even in some selected districts.

The media, which had a fractious relationship with the Rawlings administration, has now developed such a congenial relationship with the government that opposition parties accuse the media of being 'in bed' with the government. Says President Kufuor: "There can no longer be any talk of a culture of silence in the country and people go about their businesses without fear or intimidation and express their views freely."

As election day draws near, all the parties have intensified their campaigns with some adopting the end-justifies-the-means measures and resorting to various fair and foul tactics in their bid to out-do their opponents.

Many political commentators agree that this year's elections are crucial for the NPP since the party won the 2000 elections with the support of some of the smaller opposition parties. Some analysts, therefore, contend that the December elections will be a litmus test for the NPP's ability to win elections on its own merit.

The NDC's Professor Mills promises that "a new NDC government will move the economy from dependency on foreign donor charity to self-help, domestic initiative and indigenous entrepreneurship".

"It means cutting down the bloated government and its army of elite political functionaries with over-generous remuneration, so that the nation's resources can be used for the people's benefit and not for the luxurious lifestyles of a privileged few," he adds.

A nationwide opinion poll on the forthcoming elections conducted by the National Commission on Civic Education (NCCE) has revealed that education is the topmost issue for the electorate followed, by health and employment.