Petition Against the Creation of Additional Regions

From : Yakubu Musah Seidu (A private Citizen) To : THE CHAIRMAN, COMMISSION OF INQUIRY FOR THE CREATION OF NEW REGIONS Date : 14/12/2017 I Yakubu Musah Seidu a private citizen wish to petition your commission against the creation of additional regions in Ghana. Mr Chairman, while there may be some pockets of demand for the creation of new regions I believe that demand is not substantial and there is no real need for them and these are my reasons for stating so 1. The decentralization process that we are implementing in Ghana today does not see the region as a fulcrum of development, the region is seen as a way of de-concentration of the national Ministries, Departments and Agencies (MDAs), One can call them outpost or annexes of the national MDAs. It has no policy making power, it is setup to coordinate and harmonize district level policy for the various national level MDAs. 2. The district level is the real fulcrum of development, it is the level of devolution, where decentralization in its true sense of the concept is played out. Section 4 (1) of the Local Government Act, 1993, Act 462, provides that “Each District Assembly shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its own name”. Section 4 (2) states that: “A District Assembly shall have power for the discharge of any of its functions to acquire and hold movable or immovable property, to dispose of such property and to enter into any contract or other transaction”. The District Assembly (DA) is the policy making body with legislative and taxation powers. The DA has its power derived from Article 241 (3) of the Constitution which states that: “Subject to this Constitution, a District Assembly shall be the highest political authority in the district, and shall have deliberative, legislative and executive powers”. The regions have no such powers. 3. The law also made provision for the creation of the District Assemblies Common Fund (DACF), which we can call the national cake, this cake is distributed among districts not among regions. So if anybody wants to ensure that a particular area gets more of the national cake, she should be thinking of getting them more districts not regions which does not bring any "cake" home. 4. The creation of a region is not as straight forward as creating a district, it might have to go through difficult and expensive processes such as a referendum, only to create an entity that adds no real value to the lives of the people, except further deepening of the tribal and ethnic divide 5. The argument that having a region near you could bring development in not convincing to say the least because the proponents have not adduce even a single reason why that can spur development. There seem to be some underlying tribal currents for the call for additional regions, of course no one wants to live in "compound house". But at what cost? can we set a precedence of given people additional regions as and when they call for it? 6. The creation of additional regions would be an attempt to re-centralize government instead of deepening the decentralization process. If we deepen our decentralization process, the call for additional regions would become a mute, for example people would not need to travel from the districts to acquire passports and other services because those services would be readily available in the districts. 7. The resources that would be expended to put up the infrastructure and to staff the additional regional capitals could be better applied else where. Students are dying in our schools of diseases emanating from overcrowding because we do not have the resources to decongest our schools, and in another breath we are contemplating spend money we do not have to create additional bureaucracy that adds no additional value to our socio-economic development. For these reasons, Mr Chairman I hope it is clear that there is no need for the creation of additional districts at this time in our national life. I am grateful for the opportunity to send this petition. sgn Yakubu Musah Seidu (0201616123) yakubumusah31@gmail.com

CREATION OF NEW REGIONS IS PUTTING PLASTER ON A DIRTY WOUND

I am amazed at how a flight of thought on a political platform suddenly metamorphosed into a policy decision in Ghana without it being subjected to any policy analysis, while those who knows better sits in silence (Make us cherish fearless honesty). One such policy is the reorganisation of regions promised by the two major political parties during the 2016 electioneering campaigns. The NPP promised to split the western region into two ostensibly because some chiefs complained that it takes them 7-8 hours to travel to the regional capital Secondi. Not to be outdone the NDC promised to create 5 additional regions. The NPP won the election and have started putting in place measures to create those additional region(s). This is a good approach if the solution to the problem were to be well thought out, which in this case is not. The reason why it takes 7-8 hours to travel to the regional capital is not a fact of distance it is a matter of very bad roads and the western region have so many of such roads. The northern region with equally bad roads is the largest region in terms of land area but with good roads one could traverse the region from Bole to Bunkpurugu in five hours or less. Now let me explain why the creation of additional regions is a bad idea which the policy analysis process would have weeded out had it been subjected to it. 1. The decentralization process that we are implementing in Ghana today does not see the region as a fulcrum of development, the region is seen as a way of de-concentration of the national Ministries, Departments and Agencies (MDAs), you can call them outpost or annexes of the national MDAs. It has no policy making power, it is setup to coordinate and harmonize district level policy for the various national level MDAs. 2. The district level is the real fulcrum of development, it is the level of devolution, where decentralization in its true sense of the concept is played out. Section 4 (1) of the Local Government Act, 1993, Act 462, provides that “Each District Assembly shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its own name”. Section 4 (2) states that: “A District Assembly shall have power for the discharge of any of its functions to acquire and hold movable or immovable property, to dispose of such property and to enter into any contract or other transaction”. The District Assembly (DA) is the policy making body with legislative and taxation powers. The DA has its power derived from Article 241 (3) of the Constitution which states that: “Subject to this Constitution, a District Assembly shall be the highest political authority in the district, and shall have deliberative, legislative and executive powers”. The regions have no such powers. 3. The law also made provision for the creation of the District Assemblies Common Fund (DACF), which we can call the national cake, this cake is distributed among districts not among regions. So if anybody wants to ensure that a particular area gets more of the national cake, he should be thinking of getting them more districts not regions which does not bring any cake home. 4. The creation of a region is not as straight forward as creating a district, it might have to go through difficult and expensive processes such as a referendum, only to create an entity that adds no real value to the lives of the people, except further deepening of the tribal and ethnic divide 5. Had it been established that the people working at the Regional Coordinating Councils (RCCs) are overwhelmed with their work load, we might consider additional regions, even with that we could expand the existing RCCs. The creation of additional region(s) looks to me like putting plaster on a dirty wound, it does not bring any healing (Development) to the injured (Electorates), it could actually mask the real problem from a good solution. In this country if an institution is not efficient we don’t find out why, we only add to it only for the new creation to suffer the same bottle necks. My view is that let’s subject the creation of new regions to simple cost effectiveness and efficiency analysis and made same public before embarking on this project. Parliament as it is currently constituted might not be able to block the appointment of the designated minister because both sides made the promise to increase the number of regions.

Why NDC Lost Part 1

Why the NDC lost the Election. Since the declaration of the 2016 election results, I have heard so many arguments about why the sitting president and the ruling government lost the election. Now I will explain why the NDC was trounced at the pools. The meat of the problem is the Economy, Yes the economy. It doesn’t lie, the party embarked on this massive infrastructure which is good except that it was financed with debt. With our external debt pilling up we had to run to the IMF which imposed their favorite tool on us, austerity – increase revenue through tax and other means, full cost recovery for public utilities, reduce spending including freeze on public sector employment etc. Government was also borrowing locally through the issuance of treasury bills and banks were rather comfortable with the T-Bill rate they were not interested in taking any risk by lending to businesses except to those sectors that could turn such loans around quickly unfortunately these sectors are the import sectors. So things that could have been produced locally end up being imported. So very few jobs were created if any at all. In an attempt to reduce expenditure, promoted nurses and teachers were not being paid their due, if it finally comes mostly after one year, they are paid three months. Plus, the freeze on employment of newly trained nurses and teachers. To cap it the government decided to abolish the allowances paid to trainee teachers and nurses. Some of these students settled for these institutions because they assumed that employment is guaranteed for them after competition. So if you are a student in these institutions, you are denied your allowance and you chance of getting employment after completing is reducing by the day, so if someone comes promising to restore your allowance and ensure employment for you, what would you do? The NDC lost that constituency plus their parents and siblings. Hundreds of thousands of young professionals are being churned out of both the public and private institutions with no job openings to absorb them. These are people with high hopes. Businesses were being overtaxed in addition to their inability to get affordable credit, there was no way they could grow and create jobs. Throw in the high profile corruption scandals such as the bus branding, Woyome, GYEEDA SADA which the NPP hyped as much as they could and you have a fertile ground for the NPP to plant their change message. In addition to all these the party decided to run a flamboyant campaign which rather angered most of the youth. Of course with only one message which is the infrastructure, it was more convenient to spend more money to propagate their message which they had very little to begin with. It was therefore not surprising that the second defacto message then became the attack on the NPP’s candidate. Running an economy is balancing game more like dealing with a hydra headed monster, if you focus on one you will be killed by the others and that is what happened to the NDC. I will pause hear, but I would be back to explain why the NPP did not win but rather it was the NDC that lost, watch out.

The Ghana Heritage Fund; Hurting the future with good intentions

It has been six years since Ghana started commercial production of crude oil, in the run-up to commencement of production a lot of preparations were made including the enactment of the relevant legislation to ensure prudent management of the resource. To avoid the pitfall that have befallen other countries that have found the “black gold”, the Petroleum Revenue Management Act 2011 (Act 815) was promulgated. Act 815 adopted the Norwegian model which splits petroleum revenues into pools with substantial parts invested offshore. In Ghana Act 815 established the petroleum holding fund into which all revenue from the resource are lodged. This funds are then allocated to three main accounts based on a formula to be determined by parliament, these accounts are the budget, heritage and stabilization funds. Act 815 was designed to remove those pitfalls associated with the commercial oil production in other countries. These pitfalls include the Dutch disease, inflation (overheating of the economy), increased risk of corruption and investment into projects with low economic returns. According to a Bank of Ghana (BoG) semiannual report for Jan-Jun 2016, the total revenue that have accrued to the country is US $3,285,248,838.84 out of which 43.22% (US$1,420,140,861.30) have been allocated to the Annual Budget Funding Amount (ABFA), 30.18% (US$991,575,834.69) have been allocated to GNPC the whiles 18.81%(US$617,816,104.68) was disbursed to the Ghana Stabilization fund (GSF) and a paltry 7.78% (US$255,716038.17) was disbursed to the heritage fund. The Heritage fund which is to ensure inter generational equity in the benefits of the finite resource and the GSF are supposed to be saved offshore. These are to ensure a steady flow of dollars into the economy to prevent the cedi from becoming too strong and hurting the country’s exports of other commodities. It will also allow the smoothing of expenditure across the business cycle. For all intent and purposes, this should have been a good law but in reality it is not and I will explain why. During the first half year of 2015 the yield on the heritage and the stabilization funds were -0.54% and 0.33% respectively and 0.74% and -0.01% for the second half year of 2015. This means that Ghana was paying the fund managers for keeping the heritage fund in the first half year of 2015 and the stabilization fund for the second half year of 2015. In 2016 the yield was somehow better it was 4.93% and 0.33% for the heritage fund and the stabilization fund respectively for the first half year https://www.bog.gov.gh/privatecontent/Public_Notices/Semi%20Annual%20Report%201st%20half%202016%20FinalV1.1.pdf What makes it bizarre is the fact that whiles we were paying the fund managers for keeping our fund in 2015, the very same government was borrowing by issuing sovereign bonds at a coupon rate of 10.75%. Does it really make sense to put the heritage and stabilization fund outside the economy knowing very well its potential impact on the local currency which is declining? Again in 2016 the government have issued another sovereign bond at a coupon rate of 9.25% for another 750 million USD. http://citifmonline.com/2016/09/08/ghana-issues-fifth-eurobond-at-9-25/ The rationale behind Act 815 was to prevent Politicians from pursuing their short term political interest at the expense of the long term development needs of the country by preventing disruptions in the business cycle and the economy as well as ensuring inter generational equity such that future generations after the resource have been depleted would also have their fair share of the resource. The question now is with the rate at which government is borrowing would these objective be achieved? The very generations we are paying fund managers to keep the money for are the same generations we are busily accruing loans for them to come and pay. To add salt to injury we are accruing more debt and at steep interest rate than we are saving for them. This defeat all forms of logic and common sense. Unless we are able to enact a law that puts a ceiling on government borrowings, the very mischief Act 815 was enacted to cure will be our lot.

IS SADA SLIDING AGAIN

SADA the Savanna Accelerated development Authority was set up to help bridge the the economic gap between the South of Ghana and the North (Savanna région). Less than two years into its operation, it was riddled with corruption, ineptitude and recklessness all in gargantuan proportions. These were serialised by joyfm's Manesseh Awuni as the Sad SADA Saga. The huge embarassment led to the chief exécutive been fired and the Whole setup bein reorganised.
SADA is yet to demostrate to Ghanaians that valuable lessons have been learned from its chequred short history.
Some few months a go SADA was in The news again This time it is investing in energy sector. That in itself is not a bad idea, but is that the most pressing need at the Moment and how many people will be taking out of poverty with that Project.
It does appear to me that either the SADA authorities have no clue about what they are supposed to or they are deliberately being reckless with the tax payers money.
Common sense demands that they find out why there is an economic gap between the SADA Zone and the south in The first place before they think about what can be done to bridge that Gap.
There are several reasons for the widening economic gap between the two climatic zones.
the major ones are colonialism, resources endowment ans climate, yes climate. The colonial powers only wanted the north to ne source of cheap labour for extracting the resources in the south for Export. There was therefore no need to build infrastructure there or to educate the people. After independence attempts habe been made by some government to bridge the gap especially on The educational front secondary schools and Training colleges under Dr Nkrumah and The UDS under Flt Lt Rawlings. But economic structure of the country has not changed that much so the infrastructure gap is still glaring. For example there is no Single industry that employs More than 500 people in The SADA region.
Climate is a factor because as one moves from the Burkinafaso border towards the south, the level of poverty also reduces as the level of rainfall increases. This is so because the rainy months reduces from year round in western south to a little over four months in The upper east Region. How does any one expect farmers to survive the whole year on five months productivitie?
The number of people who are reliant on farming for their livelihood is also very high in The SADA Region. This is understandable becuase the Region has very little alternative livelihood opportunities outside farming.

With This background I was expecting that the first projects that SADA will be undertaking will be the construction of dams, which will enable farmers in The SADA region to be able to produce a little More into the year. This is an effective and quick Way of reducing poverty on a large scale sustainable Basis. Is not surprising that Ghana is importing tomatoes ans other vegetables from Burkinafaso which is even further north? What is that they are getting right that we are getting wrong? The answer is not far,Dams, yes dams,they recognised they have water Problem so they have build a lot of dams that are used dort irrigation during the dry season. I am surprised this common sense eluded the authorities at SADA.
The next expected area of intervention by SADA, would have been The construction of feeder roads to bring The little that is produced into The market. The area I building of factories for processing.

Asiedu Nketia is right, Let us take a second look at the heritage fund

Some days ago the General Secretary of the ruling National Democratic Congress (NDC) Mr Johnson Asiedu Nketia suggested that considering the hardships that Ghana’s economy is facing, we should consider using the money from our petroleum revenue that has been lodged in the heritage fund to solve our problems. As would be expected the rented press of the opposition descended rather heavily on him with headings such as “let’s blow heritage cash- Asiedu Nketia”, “let’s chop heritage money General Mosquito”.

The heritage fund, a creature of the petroleum management act 2010, is for all intent and purposes a good law as it is intended to ensure intergeneration equity and as a preventive measure against the Dutch disease. But a good law is just like a dangerous weapon, what it will be used for good or bad depends who is wielding it.

Ghana’s petroleum management Act 2010 is fashioned in a way that is supposed to conform to international best practices as is the case in Norway. Norway one of the most developed countries in Europe has a population of 5m and a GDP of 282 billion in 2012, the third largest exporter of natural gas. Norway was one of the few countries that recorded positive growth between 2010 and 2012 when most of Europe were in a recession, Norway has  one of the lowest unemployment rate in the world (3%), Literacy rate is 100%, GDP per capita is 56,000, ranked 9^th in the world.

Ghana has a GDP of 98 billion a population that is five times that of Norway, with literacy rate of 71%, and GDP per capita $3,700 (Each Norwegian earns 15 times more than what his counterpart in Ghana earns). Ghana’s economy is completely different from that of the Norwegian Economy. So right from the word go importing a law that has served the Norwegians well (international Best practise) might not be best practice for Ghana.

Again Norway discovered oil in the 60s when they already had a relatively developed infrastructure and a full blown industrial sector, these are non-existing in Ghana.  Also Norway owns about 60% of all their petroleum resources, how much does Ghana own? Here we are taking about 60% of a much bigger resource, this gives the Norwegians much space to do so many things that Ghana with our negligible petrol resource that is spread over a five times bigger population cannot do.

I stand to be corrected, the heritage fund have been invested abroad and is earning us 1% interest per annum which is less the average inflation in Europe which is 2%, so technically were are paying for our heritage fund to be managed, while our government borrows at an average rate of 8%. This leaves one to wonder whether our decision makers have their heads properly screwed on. In one breath we are saving to secure the future of generations unborn and in another we are borrowing at 8 time’s higher interest rate for them to pay. Why can’t we invest these funds locally to create jobs for the youth like this writer whose future we are pretending to secure with this fund. It could also be another anchor to stabilise the cedi that seem about to summersault.  Why can’t we spend this fund on developing some selected sectors that we have comparative advantage in?

The main argument for the heritage fund I am told is that the politician is short sighted and might squander all the resources and future generations will then suffer. Which I agree but the fact is that future generations are even going to suffer more judging by the rate at which we are rushing for loans left right and centre.

Putting one set of money beyond the reach of politician while allowing him full access to another is a little bit foolish. As we say it in twi “Sika bi Nkyen sika bi” (money is money). After passing the Petroleum Management Act, parliament should have gone further to tie the hands of the politician (should I say his legs) by putting a ceiling on how much they can borrow over a period of time taking into account how much is accumulating in the Heritage fund. That is the only way we can really ensure intergenerational equity in the use of our natural resources.

The Norwegians did not invest abroad right from the word go as we are doing, they invested in infrastructure, health and education before venturing abroad. Today 2% of all investment in Europe is financed from the Norwegian petrol fund. Norway’s system of managing petroleum revenue has been adjudge the international best practice because they learned from what happened to the Netherlands and other countries that stroke oil before them and we have Norway and all the others to learn from

He who have eyes to see let him see, she who have ears to hear let her hear.

Yakubu Musah

Tamale

Single Spine is the Problem

Running an economy is a balancing act so any injection must ensure that the system have enough room to accommodate it or an outlet have been created for it. When salaries and wages rise faster than productivity, inflation is the natural consequence. As workers get more money than they are producing as happened in spain, italy, portugal etc. On the other hand when productivity rises faster than salaries and wages, stagflation is the result. As workers cannot buy what the produce as happened to germany. Except in they case of germany what cannot be bought was exported. Ghana and Germany are sitting on opposite ends of the economic spectrum. The Single Spine Salary Structure (SSS) in Ghana has doubled and in some cases tripled the salary of some public sector workers without commensurate increase in productivity. At The same time The government embarked on massive expenditures mostly for political reasons which pushed even more money into The economy. While the germans were exporting their surplus, Ghana was/is importing to make up for the rising demand occassioned by the steep rises in incomes(disposable income) Just at the same time that our imports surged the prices of our major exports mainly cocoa and gold went down. So More dollars (foreign currency) were flowing out than flowing in. As if that was not bad enough ghana's economy was rebased making us a middle income country overnight, therefore other grants from development partners that could have helped also dried up overnight. Also 8 months of litigation over presidency, The GEEDA and Woyome saga's have not given The donor Community the confidence they needed. With fewer and fewer dollars remaining in ghana the price of the dollar will also keep rising as a result of higher and higher demand and lower and lower supply. The turbulences that the ghanaian economy is facing is therefore to a larger extent self inflicted. From where I sit it is more political than economic. And both the NDC and NPP are guilty considering the fact that both sides used the SSS for political gains. Although some other factors have been mentioned here as contributing to the imbalance in the ghanaian economy namely other government expenditure, lower commodity prices, lower inflow of grants, the SSS is the most important straw the broke the camels back. Having diagnosed The Problem I will offer my treatment. Which is rollback of the SSS. I know This politically not feasible. But it is the only quick and fast remedy to the Problem. There are several ways of treating tumors, prayer, drugs etc but the most effective means is the surgical removal and it is also the most painful. A word to the wise is enough.