Ghana: Ghanaians head to the polls in December; future government expected to follow IMF-backed policy
November 9, 2016
Ghana will head to the polls on 7 December to elect a President and members of parliament in the context of a struggling labor market and widespread social discontent. After winning by a small margin in 2012, President John Mahama of the ruling National Democratic Congress (NDC) faces another tight race against the main opposition leader, Nana Akufo-Addo of the New Patriotic Party (NPP), who blames the country’s economic deceleration on the current executive’s mismanagement and corruption. Analysts expect the NPP to take over from the ruling NDC, though a second ballot could be required since the polls see the two political forces running almost neck and neck. The two parties’ programs are broadly similar and analysts are confident that either party will uphold the IMF’s policy prescriptions. Any change in government is not expected to imply a significant change in economic agenda.
The NDC, which in April 2015 signed an Extended Credit Facility (ECF) with the IMF totaling almost USD 1.0 billion, is seeking a third consecutive mandate. It has focused its campaign on the successful implementation of the economic reform package it adopted in 2014 and promised it will continue to pursue the country’s wellbeing through a comprehensive education plan and stronger infrastructure investment, while controlling public expenditure. However, the unpopular austerity measures implemented by the current government in the aftermath of country’s bailout have made it very unpopular with the electorate.
The deteriorating economic conditions under Mahama’s presidency are expected to work in NPP’s favor. According to the official party manifesto, an Akufo-Addo-led administration would undo four years of economic deceleration by enhancing fiscal responsibility and financial stability through the introduction of a fiscal responsibility law and a Fiscal and Financial Stability Council. Moreover, it would shift the focus of economic policy away from taxation on production by abolishing a number of taxes that weigh on firms, though this looks to be unlikely, at least in the short term, given the country’s weak fiscal position.
The country’s electoral spectrum is divided in two. President Mahama’s candidature will continue to be supported in the Eastern and Northern regions of the country, due to his historical and tribal legacy; while the opposition will enjoy a stronger position in the central regions. Securing Greater Accra, the second most-inhabited and usually a swing region, will be key for the winning party.
Author: Andrea Vetrugno, Economist