I’m John Mahama But Not Gordon Brown - The Economy

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Parent Category: Our Country

Category: Business & Finance

Created on Wednesday, 23 October 2013 00:00

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The Economy

If Osafo-Marfo’s revelations [“Ghana’s Troubled Economy] have anything to do with the recent presidential confessions, then we respectfully entreat leadership to rethink. Osafo Maafo has told the world that in 2009, the ruling National Democratic Congress (NDC) government, overspent the approved budget by GH¢300 million; shot to GH¢800 million in 2010; increased to GH¢1.3 billion in 2011; and at the end of 2012 stood at a “stomach churning and mind-blowing GH¢4.8 billion.” “Within this shell of a figure, the respective overshooting by the respective MDAs is as follows: Ministry of Interior GH¢19 million; Ministry of Health GH¢27 million; Ministry of Education GH¢60 million; Ministry of Environment, Science & Technology GH¢60 million; Ministry of Energy GH¢70 million; GYEEDA GH¢200 million, Ministry of Roads and Highways GH¢270 million; Ministry of Youth and Sports GH¢350; Office of Government Machinery GH¢650 million, including GH¢15 million for guinea fowl business, and GH¢33 million for tree planting, all in the name of SADA,” he said.

This was said about Brown’s Labour: “So when, in his pre-budget report, the chancellor unveiled big increases in government borrowing - £20 billion for 2002-3 and £24.5 billion for 2003-4 – it was a highly significant event. For both years the new borrowing projections were about twice what the chancellor [Brown] had forecast the previous spring. The indignities were many. On the day after the pre-budget report the headlines read “Goodbye Prudence” and the commentators asked whether this Labour chancellor was going the way of his predecessors.” Thus “Brown’s early prudence, [it is said,] may have delayed the consequences of tax and spend (particularly spend) but they were now coming through with a vengeance. Gordon Brown was prepared for a poor reception but still winced at the blows. The Treasury, of course, denied any loss of control over the public finances. The world economy was emerging only slowly from recession and in every country the public finances were coming under pressure.” This is similar to Mahama’s economists and here, with particular reference to Fiifi Kwetey.

In respect to academic attacks on the economy, it is reported that Brown and his advisers also insisted that there was no question of the government failing to meet its fiscal rules – the “golden” rule of borrowing over the economic cycle only to fund investment, and the sustainable investment rule, of keeping government debt below 40% of gross domestic product. Borrowing in 2002-3 was £22.2 billion, and thus above the £20 billion forecast. In his April budget that year, the chancellor was forced to revise up his 2003-4 borrowing projection up to £27 billion, followed by a slight drop to £24 billion in 2004-5.

Business Voice (Oct. 2003), wrote: “as Brown prepares to step up to the plate to deliver his 2003 pre-budget report, he faces an unpalatable choice. He could stick to the borrowing projections he made in April, in which case nobody would believe him. Or he could revise them up again, and accept another batch of humiliating headlines…This year’s headlines, will not be quite as bad as last year’s. The chancellor’s problem is that the numbers are going against him. With figures in for nearly half of the 2003-4 fiscal year, tax revenues are running below the Treasury’s forecasts, while government spending is coming through much faster. Current spending by government is up 9 per cent, the Institute for Fiscal Studies says, against a projected 6.5 per cent. Capital spending is up by a massive 175 per cent, which could be great news for the infrastructure but does not help a chancellor watching his budget deficit grow wider by the day.”

The National Institute of Economic and Social Research said Brown had only a 50-50 chance of achieving his golden rule. “Since that rule has been presented as sacrosanct, the potential for further serious damage to the chancellor’s reputation is large. The borrowing problem has three sources: The economy, while avoiding recession has been growing below trend, and this has naturally pushed up borrowing. With optimism increasing, that factor should diminish in importance. Second, tax revenues have been weak, even in relation to the sub-trend growth. Corporate tax revenues, in particular, have been well below what the Treasury expected. The danger here is a repeat of the first half of the 1990s, when for several years economic recovery did not produce the revenue boost the then Conservative government was relying on. Third, public spending appears to be obeying the old rule that once let off the leash it becomes impossible to keep under control. It took time on this occasion for spending to get going...it looks unstoppable.” I don’t know the value of Ghana’s economy but I don’t want to be Brown.

The Chancellor of the Exchequer; whose premiership, arose against the backdrop of struggling economy and poor international diplomacy on the part of his once charismatic predecessor- Tony Blair, resigned with the following speech: “I said I would do all that I could to ensure a strong, stable and principled government was formed, able to tackle Britain’s political and economic challenges effectively. “My constitutional duty is to make sure that a government can be formed following last Thursday’s general election… “Only those who have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good… “I have been privileged to learn much about the very best in human nature, and a fair amount too about its frailties, including my own. “In the face of many challenges in a very few short years- challenges up to and including the global financial meltdown - I have always strived to serve, to do my best in the interests of Britain, its values and its people.” With this Brown bade farewell to his colleagues, staff and thanked his wife- Sarah and their two kids.

It is argued that one of the main differences between Gordon Brown and Tony Blair was Blair's superiority in selling hope to an electorate. How would you differentiate John Dramani Mahama from his immediate-predecessors- Professor John Evans Atta-Mills and Flt-Lt. Jerry John Rawlings? Such comparison is yet to be made. But this is Kevin Toolis’ political assessment (The tragedy of Gordon Brown - the forgotten Macbeth of British politics: A withering portrayal by Left-wing writer who turned ex-PM's failure into a stage play, The Daily Mail UK, 11 August 2013) of Tony Blair and Gordon Brown: “Election manifestos come and go but a true leader only ever sells one commodity- hope. And Brown failed badly at that basic task. Blair, however sleazy he has become, always sold hope better. In a real-life Game Of Thrones, the prize of power that Gordon Brown had plotted and schemed for all his life eluded him even after he finally seized the crown from his usurper Tony Blair. Like some ancient Greek heroes, Brown ruined the better part of himself by his fateful indecision, a wilful denial of reality, and by the warped and dysfunctional court of acolytes he had created around him…”

Not until recently, John Dramani Mahama-led NDC Government had reasoned that economically, it makes no sense in sitting sobering on the country’s mass untapped treasures without it being mortgaged to advance the personal development of its peoples who needed it today. The government accordingly; deemed it fit in going on borrowing spree, all in an attempt to better the lives of the ordinary Ghanaian. Today, Ghana’s estimated debt to Gross Domestic Product (GDP), as recently announced by President John Mahama, who spoke at the 4th Ghana Policy Fair, stands at about 49.3 per cent. The international credit rating agency- Fitch, has degraded Ghana from a B+ to a B, on the basis of its handling of its wage bill. President Mahama reassures the Ghanaian, with regards to the debt burden. “We may be facing temporary challenges, but measures have been put in place to overcome these and the economy is responding positively,” he said.

With an oiled economy, what bedevils Mahama’s socio-political uncertainties? “Tony Blair committed the nation to the worst foreign policy disaster- the invasion of Iraq- since the Second World War. But every night Blair slept soundly in his Downing Street bed as suicide bombers wreaked slaughter on the streets of Baghdad. In contrast, Brown beat himself up over the smallest political disaster, such as the November 2007 loss of child benefit details for millions of people by a junior HMRC postal clerk. Unlike Blair, he failed to delegate and for much of his time in Downing Street… Something else from his Scottish upbringing was to have an even more profound effect – the teenage accident on the rugby pitch that blinded Brown in one eye and seriously impaired his sight in the other…”

John Dramani’s childhood was almost all roses. But unlike Brown’s ascension to the political throne described as more like a Macbeth than Henry IV, and even without the greatest economic crisis of our lifetime, John might not want to be remembered as Shakespeare’s Scottish warlord; who ruled alone, in fear; weakened and beset by his own frailties and ultimately, overcome by the forces he had himself unleashed. John is a “born socialist and historian” and seems to understand the strengths of organized labour.It is said that election manifestos come and go but a true leader only ever sells one commodity- hope. How then, could John Mahama's trials be on education or giving hope to the frail street mental health patient?

JusticeGhana