Ghana’s Ambassador to the United States of America, Dr Barfuor Adjei-Barwuah, has emphasised the need to support Ghanaian businesses seeking to penetrate the American markets through effective collaboration with the Ghana Investment Promotion Centre (GIPC) and other relevant state agencies set up by the government to assist local producers to reach the international markets.
Ghana has benefited from international aid to promote economic and social development to improve the standard of living and alleviate poverty in the country. Aid funds from international donors have been used to pursue infrastructural and social projects geared toward improving the livelihoods of citizens.
In 2018, the country declared a Ghana Beyond Aid agenda aimed at weaning itself from foreign donations and building a nation that is beyond dependence on the charity of others to cater for the needs of its people.
A nation that can engage other countries competitively through trade and investments, and through political cooperation for enhanced regional and global peace and security. Has this agenda been a good path for the country in the wake of aid reductions in the world?
Ghana and International Aid
Ghana currently receives aid in various forms, for general budgetary support, sector budgetary support and project aid using parallel systems. It is reported that until the mid-1960s, aid flows were relatively unimportant in Ghana as the Nkrumah government was highly suspicious of the major donors (Britain and the USA) which did not help the already poor state of affairs.
But more particularly, the economy, as it emerged from colonial rule had inherited substantial foreign exchange reserves, little debt, and a small public sector. Very little foreign exchange and budgetary support were needed until the 1961 balance-of-payments crisis (EVALUATION OF THE IMPLEMENTATION OF THE PARIS DECLARATION ON AID EFFECTIVENESS: PHASE II).
Aid to Ghana has been provided by its development partners; bilateral and multilateral donors. However, some further `informal’ classifications exist, namely, traditional donors and nontraditional donors. The former currently comprises 23 multilateral and 24 bilateral donors.
The multilateral donors are: The World Bank, African Development Bank (AfDB), European Union (EU), Nordic Development Fund, Arab Bank for Economic Development in Africa, European Investment Bank, OPEC Fund for International Development (OFID), Global Fund to Fight Aids, Tuberculosis and Malaria (Global Fund), Global Alliance for Vaccines and Immunization (GAVI), and 12 organs/agencies of the United Nations.
The bilateral donors are made up of traditional donors like Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, the UK, and the United States of America. Non-traditional bilateral donors who are increasingly becoming important in Ghana’s aid architecture include the BRICK countries, the Saudi Fund, and the Abu Dhabi Fund.
These non-traditional donors do not participate actively in current aid coordination efforts with the traditional donors and the Ghana Aid Policy and Strategy. According to OECD DAC Data Ghana in 2019 received a net Official Development Assistance ODA of USD 4.05 billion representing 20.9 percent of the country’s GNI. In 2018, it received net ODA of USD 3.81 billion representing 18.8 percent of the county’s.
GNI, and in 2017, USD 3.79 billion was received as net (ODA) also representing 19.4% of the GNI of the country for the same year.
Further analysis of the net ODA over the three-year period indicates that, the real values for 2017, decreased by USD 0.02 billion when compared with that of 2018 however, the real value for 2019 increased by USD 0.24 billion when compared with the real value of 2018.
Also, the ODA for the three-year period gives an average ODA of USA 3.86 billion. Again, the percentage of the ODA of Ghana’s GNI over the three-year period (2017-2019) gives an average ODA to GNI of 19.73 percent.
International Aid; sources, trends and statistics
Official development assistance (ODA) is defined by the OECD Development Assistance Committee (DAC) as government aid that promotes and specifically targets the economic development and welfare of developing countries, which include Africa and more specifically Ghana.
The Committee is a unique international forum of large providers of aid, including 30 OECD member countries, non-OECD member countries. The committee also includes the World Bank, the International Monetary Fund (IMF), United Nations Development Programme (UNDP), the African Development Bank, the Asian Development Bank, and the Inter-American Development Bank who participate in the DAC meetings as observers.
The ODA detail summary report for 2017 indicates that total ODA of USD 146.6 billion representing 0.31 percent of the Gross National Income (GNI) was contributed by members of the OECD DAC. For 2018, the detailed summary report indicates that ODA by DAC members totaled USD 153.0 billion, representing 0.31 percent of DAC member’s combined GNI.
This comprised USD 150.4 billion in the form of grants, official aid loans or contributions to multilateral institutions; USD 1.5 billion to development-oriented private sector instrument (PSI) vehicles, USD 1.0 billion in the form of net loans and equities to private companies operating in ODA-eligible countries and USD 0.2 billion of debt relief.
For 2019, the detailed summary report indicates that ODA by DAC members totals USD 152.8 billion, representing 0.30 percent of DAC member’s combined GNI. This comprised of USD 149.4 billion in the form of grants, loans to sovereign entities and contributions to multilateral institutions; USD 1.9 billion to development-oriented PSI vehicles, USD 1.4 billion in the form of net loans and equities to private companies operating in ODA-eligible countries and USD 0.1 billion of debt relief.
ODA contributed by DAC members between 2017 to 2019 can be seen to have increased by USD 6.4 billion from 2017 to 2018 and dropped by USD .2 billion from 2018 to 2019, in real values. Further analysis on the ODA contribution as a percent to the member countries combined GNI shows an average contribution of .31 percent over the three-year period.
This is lower than the United Nations’ ODA as a percentage of GNI. It is worth noting that the UK’s ODA contribution in all the three years under review was .7 percent of the country’s GNI.
The Global Economic Prospects, a World Bank report states that, the COVID-19 pandemic has, with alarming speed, delivered a global economic shock of enormous magnitude, leading to steep recessions in many countries.
The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020—the deepest global recession in eight decades, despite unprecedented policy support. It is clear that the impact on the global economy particularly OECD DAC members is going to affect their aid contribution in support.
UK Aid in focus
The United Kingdom (UK) enacted the International Development (Official Development Assistance Target) Act 2015, which enshrined an aid target in law. This placed a legal duty on the Secretary of State (in UK) to ensure that the target for ODA to amount to 0.7 percent of gross national income is met by the United Kingdom in the year 2015 and each subsequent calendar year.
However, the act is inconsistent with the Addis Ababa Action Agenda of the Third International Conference on Financing for Development where developed countries achieve the target of 0.7 percent of ODA/GNI and 0.15-0.2 percent of ODA/GNI to the least developed countries.
The Foreign, Commonwealth & Development Office (FCDO) of the UK government uses ODA to support and deliver the 4 strategic objectives of the government’s 2015 Aid Strategy, which are:
strengthening global peace, security and governance. strengthening resilience and response to crises. promoting global prosperity. tackling extreme poverty and helping the world’s most vulnerable.
Since the enactment of the international development act, the UK government has kept to its promise of contributing 0.7 percent of gross national income to ODA. In 2017 the UK contributed USD 17.9 billion to ODA, in 2018 it contributed USD 19.4 billion to ODA and in 2019, it contributed USD 19.3 billion of its gross national income to ODA.
Dominic Raab, UK Foreign Secretary in November 2020 made a statement to the House of Commons about Official Development Assistance. He said the UK is facing the worst economic contraction in almost 300 years, and a budget deficit of close to £400 billion – double that of the last financial crisis. “Given the impact of this global pandemic (COVID-19) on the economy and, as a result, the public finances, we have concluded after extensive consideration, and I have to say with regret, that we cannot for the moment meet our target of spending 0.7 percent of Gross National Income on ODA. And we will move to a target of 0.5% next year”. He further stated that the move to reduce the ODA is a temporary measure. “It is one we have taken as a matter of necessity, and the UK will return to 0.7 percent when the fiscal situation allows”.
Direct ODA from the UK Government to Ghana is bilateral aid. This can be either exclusively for Ghana (in-country programmes), or part of UK government regional or international aid programmes with activities in Ghana (centrally managed programmes). In some cases, the UK asks multilateral agencies to implement its bilateral programmes in Ghana, which is called multi-bi spending. The UK committed £2.8 billion in bilateral aid to Ghana between 1998 and 2017, almost 70 percent of it spent in the first decade. Of the £2.8 billion, 43 percent was for debt relief or general budget support. Of the remainder, about three quarters went to the social sectors – mainly education in the first decade, then shifting to health in the second decade.
Africa must leverage investment to unleash the potential and ingenuity of its youth, its most important asset, African development Bank, President Akinwumi Adesina said at a Conference of Montreal fireside chat event.
The three-day virtual event was organized by the international economic forum of the Americas, under the theme, a sustainable recovery for people and planet.
During the fireside chat, Adesina engaged in discussion with Inger Andersen, Under-Secretary-General of the United Nations; Executive Director of the UNEP Jean Lebel, President of the International Development Research Centre (IDRC) moderated the discussion, which covered three areas: the current state of affairs with respect to COVID-19 and climate change, stimulus policies and recovery, and the role of the private sector in terms of recovery.
“Climate change is an existential crisis,” Andersen said, and one that the planet must face together. The four largest economies account for 55% of emissions, Andersen pointed out, adding that the brunt of the impact will fall on African countries as well as delta and low-lying small economies around the world. “Any recovery has to have a degree of solidarity with it,” she said.
Adesina reiterated that climate change posed a grave threat to Africans. “We have to grow differently, he said. We have to have growth that is climate resilient. Adaptation must be at the top of the agenda. The risk of actually dying from hunger is higher than the risk of dying from Covid-19.”
A report by the World Bank has noted that over the past 12 months, the COVID-19 pandemic has harmed the poor and vulnerable the most, and it is threatening to push millions more into poverty.
This year, the World Bank said, after decades of steady progress in reducing the number of people living on less than $1.90/day, COVID-19 will usher in the first reversal in the fight against extreme poverty in a generation.
The report said the latest analysis warns that COVID-19 has pushed an additional 88 million people into extreme poverty this year – and that figure is just a baseline.
Professor Godfred Alufar Bokpin, a Financial Economist at the University of Ghana, says Ghana has not progressed in fighting corruption and called for constitutional reforms to help make headway in curbing the canker.
He said the monetisation and commercialisation of election in the country made it extremely difficult to combat corruption.
"If we look at the way our democracy is highly monetized and commercialized, it is difficult to allow such a corrupt system to elect leaders and afterwards expect honesty and integrity from them," Prof. Bokpin said.
The Democratic Republic of Congo has rejoined a key trade partnership with the United States that will grant it duty free access to US markets.
It follows a proclamation issued by outgoing US President Donald Trump on Tuesday night.
Washington suspended DR Congo from the African Growth and Opportunity Act (AGOA) some 10 years ago because of alleged human rights violations under former president Joseph Kabila.
The decision affirms President Tshisekedi’s efforts to reform and strengthen the DRC’s democratic institutions, protect human rights, and fight corruption.
What is the trade partnership?
Since its enactment in 2000, AGOA has been at the core of US economic policy and commercial engagement with Africa.
It provides eligible Sub-Saharan African countries with duty-free access to the US market for over 1,800 products. That adds up to more than 5,000 products eligible for duty-free access under the Generalized System of Preferences program.
DR Congo's main exports, copper and cobalt, are included in the agreement but are already tariff-free under the System of Preferences.
Pharmacist, Kwame Sarpong Asiedu, has downplayed the possibility of Ghana securing COVID-19 vaccines by March 2021 as the reality on the ground does not support such optimism.
The UK-based Ghanaian pharmacist believes that although the country may receive the vaccine next year, it may only be possible by June 2021.
“I know that we will get vaccines but I am a realist and think that we probably wouldn’t get anything trickling in, until about the second quarter of 2021,” he told Newsfile host Samson Lardy Anyenini, Saturday.
Meanwhile, President Nana Addo Dankwa Akufo-Addo has expressed that Ghana will access the covid-19 vaccine by March 2021.
But, the pharmacist and Fellow of the Ghana Centre for Democratic Development (CDD-Ghana) has sai“The caveat is that you can only get as much as 20 percent of your population and for your vulnerable people.
“The other caveat to it (the vaccine) is that it doesn’t kick in until the end of the first quarter of 2021.”
He further raised concerns on the need for Ghana to prioritise the aged and vulnerable person for the vaccination.d the vaccine manufacturers have placed some restrictions on the distribution hence the impossibility.
A member of the legal team of the opposition National Democratic Congress (NDC), Mr. Rockson-Nelson Dafeamekpor, also Member of Parliament (MP) for South Dayi in the Volta region, has confirmed the party will file processes to contest the declared results in the Presidential election of December 7, 2020, as well as a selection of parliamentary results.