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Ghana, the ninth worst
economy?
E. Ablorh-Odjidja, Ghanadot
June 10, 2010
For what it is worth, Forbes'
on-line magazine of June 9, 2010. has ranked Ghana as the ninth
of the ten worst economies in the world. This may be a hit job,
but is it undeservingly so?
By 2008, the world was praising
Ghana as a well-run democracy, a trend setter in good governance
and its economy one of the best managed in Africa.
Ghana before 2010 seemed at peace
with the business world and was described as a desired investor
destination; thus, entered the likes of the Kosmos Oil
exploration team and the resulting oil find.
Barely 16 months after 2008, we
are now classified as the ninth worst economy.
Under normal circumstances, and
even if true, this would not make a difference for some.
The feel of Ghana at the ninth
pole position would not sound like hearing a death knell.
After all, she was in the ninth position and not the
first, the worse position on the list.
In spite of this nonchalant feel,
there is still a need to worry.
The worry must be justified by
the depth of descent, from glory as the well managed economy in
Africa to the ninth on the worst list.
This altered state, regardless of
party or ideology must be worrisome, since it is a tell-tale
sign of a potential handicap for our future development.
This is the perception that a
good citizen must read into the Forbes report.
But is the perception justified?
One would wish that the Forbes'
piece was never written.
Forbes states that
Ghana is a country that shouldn't be poor, but it is.
"The West African nation's gross domestic product per
capita," it says, “fell 9% last year to $621, ranking it 154th
out of 184 countries tracked by the IMF, below
resource-impoverished Haiti.”
Below
“resource-impoverished” earthquake devastated economy of Haiti?
Well, how low can one get, how fast, and by what means?
For Forbes, bad
things happen when “governments discourage private
investment--and economic growth--through policies of crony
capitalism, expropriation or arbitrary enforcement of the
laws….”
The new Ghana
government unwittingly did the above with the appearance of
"expropriating or arbitrary enforcement of the laws..." all for
political expediency.
To begin with, once the new NDC
government took office in 2009, it declared early that the
country was "flat broke" to the rest of the world.
After giving the country the
black eye, instead of going about realistically fixing the
supposedly broken economy, it went after some political enemies.
And the real reason for declaring the country broke, some
said, was soon made clear; to provide the excuse for settling
political spite.
The target it chose was the
legacy of the previous Kufuor, NPP administration and the
latter's business dealings with the Vodafone communications
company, followed by obstruction of the pending settlement deal
of Kosmos Oil's attempt to sell her finds to Exxon-Mobil, the
oil giant.
In the enthusiasm to settle
political scores, the NDC government might have intruded into
some global business’ initiatives; and such acts usually have
nasty consequences.
Deserving or not, the
consequences are beginning to unfold.
This Forbes piece could be the tip.
Vodafone and Exxon-Mobil are
western companies. They believe in the clever use of the media
as a tool of public relations for power, unlike our current
government that has all its confidence put in the practice of
bravado politics.
At the time of writing this
piece, it is not known whether a decision has been made by the
Ghana government to allow Kosmos to sell her rights to
Exxon-Mobil.
But from the impasse, it can be
deduced that a lot may be happening behind the scenes.
And that China may have a hand in the delay of the
transfer of Kosmos' rights to Exxon.
China's state-controlled
international oil company, CNOOC, is highly interested in
acquiring the rights to Kosmos’ Oil from the government of
Ghana.
Consequently, it is alleged, that
China is providing incentives the incentives to politicians in
Ghana to prevent the Kosmos sale to Exxon-Mobil.
Just how aggressive China has
been in this pursuit is hard to tell from outside.
But the resulting impasse from the Kufuor's NPP to the
NDC government should tell some of the story.
But it should be observed that
China has not been shy in aggressive acquisitioning of oil
stakes all over the world, including Iraq and Sudan.
Noting that Kosmos Oil is a US
based company and CNOOC a Chinese, it will not be hard to infer
a Sino-American rivalry, or a cold trade war between the two, in
the short or long term; with Ghana caught in the unpleasant
middle.
Two elephants stomping the ground
and at war with each other.
And unfortunate Ghana, because of political spite, caught
in the middle of the conflict.
But here we are.
The Forbes piece may be a fallout from this war.
E. Ablorh-Odjidja, Publisher
www.ghanadot.com, Washington, DC, June 10, 2010
Permission to publish: Please feel
free to publish or reproduce, with credits, unedited. If posted
at a website, email a copy of the web page to
publisher@ghanadot.com. Or don't publish at all.
Related article: Forbes - "The
World's
Worst
Economies"
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