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Key Issues in Ghana’s Crucial Election

On December 7, general elections will take place in Ghana to select both the president and members of parliament. Approximately 18.8 million Ghanaians are registered to participate in the voting process.

The political landscape in Ghana is primarily influenced by two dominant parties: the New Patriotic Party (NPP) and the National Democratic Congress (NDC). This two-party system creates a highly competitive environment. Current Vice President Mahamudu Bawumia and former President John Mahama are leading the candidates in the current polls.

Bawumia has served as Vice President under Nana Akufo-Addo for eight years, as the incumbent is not eligible to run again due to term limits. Mahama previously held the presidency from 2012 for four-and-a-half years before losing the 2016 elections.

Other notable candidates include Nana Kwame Bediako, a well-known businessman, and Alan Kyerematen, the former Minister of Trade and Industry, who exited the NPP last year.

Often celebrated as a model of democracy in Africa, Ghana maintains a strong reputation for its electoral processes, evidenced by its regular and peaceful transitions of power since reviving multiparty democracy in 1992. Based on past elections, results are anticipated to be announced by December 10.

Alex Vines, director of the Africa programme at Chatham House, remarks that the election outcome remains uncertain.

“This election is expected to be highly competitive. Earlier this year, I believed the NDC would secure an easy victory. Now, I’m not so sure; a presidential runoff is possible, and the NDC may perform well in parliament while the NPP could win the presidency. The reality is that we won’t know until Ghanaians cast their votes.”

Economy central to contest

The upcoming elections in Ghana have brought several critical issues to the forefront, particularly economic management, as voters express heightened concerns about inflation, rampant unemployment, the escalating cost of living, frequent power outages, and national debt.

Naidoo asserts that the combination of pre-existing problems, such as reckless borrowing and public spending that led to Ghana’s 2022 default, along with external global disruptions, have resulted in financing challenges, declining international reserves, soaring inflation, and a depreciating cedi. He notes that the effects of a commodity downturn affecting the cocoa and oil sectors, exacerbated by hyperinflation at the end of 2022, have left “people really fatigued.”

In May 2023, the IMF approved a 36-month extended credit facility totaling around $3 billion for Ghana, which is set to last until 2026. Recently, the fund sanctioned the third review of the programme, facilitating an immediate disbursement of about $360 million.

While the programme undergoes regular reviews and may change based on the election outcomes, both parties will likely need to operate within its financial constraints.

Within these limitations, the parties are attempting to create distinct paths. Jervin Naidoo, a political analyst at Oxford Economics Africa, indicates that Mahama’s NDC aims to boost government spending in social sectors. In contrast, Bawumia’s NPP plans to focus on economic stability through lowering inflation and attracting private sector investment.

“In terms of requests and immediate economic impact, there won’t be substantial changes because Ghana’s fiscal policy is constrained by the IMF programme,” says Naidoo.

Bright Simons, a Ghanaian social innovator, entrepreneur, writer, and commentator, tells African Business that voters’ focus on pressing issues discourages parties from making bold promises for significant reforms.

A tough road ahead

The foremost challenge is inflation. Consumer prices, which have increased over the last three months, climbed by 23% year-on-year in November, compared to 22.1% in October, largely driven by rising costs of essential food items.

Additionally, the strength of the cedi remains a significant hurdle. The currency has depreciated sharply against the US dollar due to the economic strains brought on by the Covid-19 pandemic, and it suffered further in 2022 when Ghana defaulted on a substantial portion of its external debt.

Since early 2020, the US dollar has appreciated nearly 180% against the Ghanaian cedi, which currently trades at approximately 15 to the dollar, up from 11 in May 2023.

Addressing these challenges—while engaging with the IMF to reform the economy and secure investments—will present a significant task for the next administration, according to Vines.

“The next administration will face a daunting task of reforming the Ghanaian economy and attracting fresh investment for sustainable growth. Politicians tend to over-promise while underappreciating the difficult choices that lie ahead; this is typical in democratic elections. Their commitments need to be scrutinized.”

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