Discipline in Economic Management: The Key to Sustainable Growth and Prosperity

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Created on Friday, 22 November 2013 00:00

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Discipline in Economic Management: The Key to Sustainable Growth and Prosperity

Speech Delivered By: Dr. Mahamudu Bawumia At the:

ALHAJI ALIU MAHAMA MEMORIAL LECTURE

NOVEMBER 13, 2013

ACCRA

Mr. Chairman, H.E. John Agyekum Kufuor, Former President of the Republic of Ghana

Honourable Ministers of State Honourable Members of Parliament Chiefs and Traditional Leaders

Members of the Diplomatic Corps

Representatives of other Political Parties

Members of the Media Distinguished Invited Guests Fellow Ghanaians

Ladies and Gentlemen

Assalamu Alailkum and Good evening!

I would like to thank all of you for making the time from your busy schedules to be present at this inaugural Alhaji Aliu Mahama Memorial Lecture. I am very humbled to have been asked by the Foundation to deliver this first lecture. In fact, when the request came, I thought there must have been some mistake as I felt someone else more qualified, perhaps a statesman like our Chairman, should be the one giving this lecture. I am truly honoured for the opportunity.

I would like to thank the Aliu Mahama Foundation and the family for organizing the anniversary celebrations to honour our former Vice-President who was also a humble, generous and decent human being. I had a very personal relationship with Alhaji and he treated me like a son. He was determined to do all he could to support me as he had done for numerous others. We campaigned together in the 2012 presidential election campaign until he was taken ill. He was a first class gentleman and all who met him would attest to that. He also had a good sense of humour.

Mr. Chairman, distinguished ladies and gentlemen, tonight I will be talking about an issue that was very close to the heart of H.E. Alhaji Aliu Mahama, the issue of discipline.

Discipline can be defined as the practice of training people to obey rules or a code of behavior or using punishment to correct disobedience. For Alhaji Aliu Mahama, a society without discipline is doomed to failure. He always lamented about how we as a people are always so inclined not to follow laid down rules or codes of conduct. In the area of sanitation for example he often wondered how long it would take us to have as clean an environment as in many advanced countries when the practice of open littering, urination, defecation and occurred with such regularity without public disapproval.

For Alhaji Aliu Mahama, it was clear that the discipline that we seek would require a change in attitudes through public education, investment in infrastructure, rigorous enforcement of planning regulations, and a National Identification database to assist in planning and law enforcement.

Mr. Chairman, I now want to turn my attention to the issue of discipline in economic management. Discipline in economic management has three elements:

• having a clear vision of what a government or a leader wants to do

• the discipline to follow through on implementing the vision and

• the fiscal and monetary discipline to manage the implementation of the vision

Fiscal discipline basically means spending within your means over a period of time. We know that any individual who consistently spends above his or her means would end up in trouble, like the infamous Abankaba. It is no different for a country. Monetary discipline on the other hand involves the central bank matching the money supply with the level of production or foreign exchange reserves in a country. Excess printing of money results in inflation. Going back into history, so important was maintaining monetary discipline in England that by 1121, 900 years ago, when there was a noticeable decline in the quality of England’s silver, all the Mint Masters in England (those who “minted” the money, equivalent to central bank governors) were assembled and punished by having their right hands cut off! . This was a rather draconian method of monetary control but it speaks to the historic importance attached to monetary discipline in some countries.

Mr. Chairman, developing countries have huge gaps in sectors such as roads, water, energy, education, health, agriculture, etc. The problem that governments face is one of insufficient financial, institutional and human capital resources to solve these problems. Governments therefore have the onerous responsibility to manage the resources of the country to meet the aspirations of its current citizens as well as future generations. While it is clear that accomplishing these goals require fiscal and monetary discipline, the lesson from history is that the temptation to abandon discipline for political expediency is very high.