Mills' Death Dazes Economy

  President John Evans Atta Mills

By William Yaw Owusu
Accra, Tuesday July 31, 2012

The passing away of President John Evan Atta Mills on Tuesday, July 24 is posing yet another challenge to the economic management of the country.

According to Africa Risk Consulting, the heightened uncertainty following the death of the President “will result in some foreign investors taking a wait-and-see stance.” 

Azim Datardina, Ghana analyst at the firm, said the current situation would imply “a slowdown in foreign exchange inflows which in turn would be negative for the already troubled cedi.” 

But global ratings agency Standard & Poor’s noted that the death of President Mills “will have no immediate impact on its ratings and outlook on the Republic of Ghana (B/Stable/B).”

The S&P said the ratings on Ghana would continue to be constrained by the country’s fiscal management, which it noted “has contributed to large fiscal deficits as well as supplier arrears.”

It noted that the ratings are supported by “strong GDP growth, strengthening oil production volumes and a track record of political stability.”

John Dramani Mahama, who was sworn in as President, promised to pursue economic policies adopted by the late Prof Mills. 

However, Ghanaian experts have varied opinions on the transitional process.

The Ministry of Finance and Economic Planning expressed its commitment to ensure that the progress made so far is not undermined as a result of the President’s death. 

Bright Simons, president of Mpedigree Network and a lead researcher at IMANI Center for Policy & Education, believes senior government functionaries might be distracted from pursuing critical and urgent programmes in order to concentrate on consolidating their standing within the ruling party or the government itself.

This, according to him, could lead to what he called “severe postponement of urgently needed activities.”

He said the extent of the impact of the President’s death would depend on the signals sent by the new President and officials of the ruling party. 

“If there is any hint of a lack of fresh policy direction and vigour to embark on new and exciting programmes with the backing of the ruling party, the default attitude of investors will be somewhat negative.”

Mr. Simons said there is a ‘nagging’ question about the economic policy direction of the new President who has been central to policy formulation under the late President, saying “he needs to set his own vision. For it to excite the government and the country, it needs to be different without betraying the essence of what President Mills was striving to achieve.”

He said for President Mahama to stimulate investor appetite, he would have to make changes at the helm of some key ministries and departments and reset the direction of a number of policies.

“Firstly, he needs to reorient the policy agenda away from some of the confusions that have so far dogged the government’s program. Number one on the agenda should be to signal a radical focus on ministerial and departmental competence. Number two is to investigate the oil revenue shortfall matter.”

He urged the new President to admit that the CDB facility will play a key role in the capitalization of major infrastructure activities next year and not this year in order to manage expectations in the Finance Ministry and lead to a clearer-eyed approach to managing national finances. 

“Government discourse should become more policy-focused. The constant squabbling on radio, the print media and on TV by key government functionaries reduces the stature of the government. A radical shift away from this type of discourse should signal a radical new era of focused, delivery-centred government.”