Africa Rising: Jeffrey Sachs says Ghana's future looks bright

Because of good governance in the past, and now oil production, Ghana is likely to reach all of the Millennium Development Goals toward ending extreme poverty and child mortality.

As the small West African nation of Ghana heads into an election year, fierce debate on whether the government of President John Mills has delivered on its developmental goals and promises is already raging. But one of the world’s most prominent development economists says Ghana is proving to be one of the strongest performers on the Millennium Development Goals (MDGs) in Africa and unlike some of its African counterparts is likely to fulfill them by the 2015 deadline.

Professor Jeffrey Sachs, director of the Earth Institute at Columbia University, visited Ghana on a recent tour to examine poverty reduction strategies and progress on the MDGs within Ghana, Mali, and Nigeria.

Sachs was the former director of the United Nations Millennium Project and played a major role in developing the eight MDGs that set forth a new set of development criteria for countries to work toward achieving by 2015. The final goals include the eradication of extreme poverty and hunger, the reduction of child mortality, universal primary education, gender equality and women’s empowerment, the improvement of maternal health, the combating of HIV/AIDs, malaria and other diseases, and environmental sustainability.

“Ghana is on track to achieve most, if not all, of the Millennium Development Goals,” Sachs told The Christian Science Monitor during an interview in Accra. “It is one of the strongest performers in Africa on the MDGs because it has been investing for a long time in health and education, gender equality, and it has made a lot of progress. But there are parts of Ghana that are extremely poor and really need a lot of accelerated investments.”

North-south divide still a challenge

Sachs says that Ghana’s biggest challenge is ensuring that development is spread evenly across all regions, particularly the arid northern part of the country, which remains desperately poor.

“There is a lot of progress in Ghana in certain parts of the country in reducing poverty and improving living standards,” says Sachs. “But there are other parts of Ghana where there is still a tremendous amount of poverty and a great amount to do, like in the North in particular.”

With few job opportunities in the arid and underdeveloped northern region thousands of Ghana’s northerners migrate southward in search of work to cities like Accra where they find themselves living in slums such as Agblogloshie and Nima, collecting scrap metal, melting down electronics, or working menial jobs for a few dollars a day.

Sachs will be working with the government of Ghana to help increase the rate of development and levels of investment within the three northern regions.

The figures

Ghana has made economic leaps in the past year due to the commencement of oil production and increasing levels of foreign direct investment. Ghana was one of world’s fastest growing economies in 2011 with an annual growth rate of 14 percent and it achieved middle-income status according the World Bank. Inflation has been on the decline in the past year and the Ghana Investment and Promotion Council said that Foreign Direct Investment (FDI) totaled $4.13 billion in the first three quarters of the 2011, a massive increase from the level of investment in the same quarter in 2010 that was at $216.71 million.

Ghana is also slowly becoming a services based economy rather than an agricultural based one. According to the Ghana Statistical Services, the services sector contributed 51.4 percent to the annual GDP, more than agriculture that had previously been the most dominant sector in Ghana, the world’s second biggest cocoa producer.

Ghanaians complain about lack of benefits  

But many Ghanaians say they do not see the development projected by these figures and complain the government has not done enough to create jobs or improve infrastructure and the livelihoods of Ghanaians.

Thomas Onppug, a 45-year-old taxi driver, and father of two who lives in the suburbs of Accra syas that he could only just cover his rent with the money he earns from driving a taxi, owned by another man.

“The government [officials] are bad and not performing well,” says Mr. Onppug, also a supporter of the opposition National Patriotic Party (NPP). “The increase in petrol cost is bad and I am not getting anything,” he adds, referring to the government’s recent removal of fuel subsidies. “The schools are not teaching well and youth unemployment is a problem. There are no jobs and that is why we are all driving taxis.”

Onppug says he pays 400 cedis or $237 in rent a month for a small apartment and earns the same amount and is supported by his fiancé.

Kwabena Agyapong, a 41-year-old father of three and watch seller at an Accra bus station complains about the lack of jobs, the removal of the fuel subsidy, and the increase of utilities.

“The government promised a lot of things that it hasn’t delivered on, like the reduction of fuel costs and the creation of jobs,” says Agyapong. “Ghanaians are suffering.… I haven’t seen any improvement and the prices [of food and basic goods] in the market are coming up.”

Opposition accuses government of overspending

Positions on economic development in Ghana are often highly politicized. In recent months the NPP has accused the government of overspending, referring in particular to a $3 billion Chinese infrastructure loan passed by parliament in September of last year, part of which is being used to fund a $700 million gas infrastructure project.

But Sachs said that the loan could be a wise decision if infrastructure projects are implemented successfully.

“Ghana is taking on a debt like this because it thinks that it can earn a significant rate of return by building out the infrastructure right now,” Sachs says. “I think that is a good judgment. Often it has been held by the international community and the IMF, don’t borrow, you have to pay your own way on infrastructure. But if the returns on infrastructure are high enough it really makes sense to borrow and spur the added economic growth and repay the infrastructure financing out of the dividends of the faster economic growth. That is what Ghana is aiming to do."

But, he warns, if the oil wealth is squandered and the investments go bad, "there isn’t really going to be another chance.”

Economists like Sachs see a positive economic and developmental future for Ghana. But like in other African nations, the distribution of the benefits of economic growth continues to be a concern.

“There is a big infrastructure challenge and there is a big social investment challenge and this emphasizes the fact that growth in Africa right now is highly uneven in where it’s occurring and which sectors it is occurring,” Sachs said. “Part of a good development strategy is to ensure that all parts of society have a chance to participate in growth and break free of poverty. It is a huge task but it is a way to think about the challenge Ghana faces.”