Crucial Challenges Facing Ghana’s Upcoming Election
On December 7, Ghana will hold general elections to choose both its president and members of parliament. Approximately 18.8 million citizens are registered to take part in the electoral process.
The political scene in Ghana is primarily shaped by two major parties: the New Patriotic Party (NPP) and the National Democratic Congress (NDC). This two-party dynamic fosters a highly competitive atmosphere. Current Vice President Mahamudu Bawumia and former President John Mahama are the frontrunners in the latest polls.
Bawumia has been Vice President under Nana Akufo-Addo for eight years, as the current leader is ineligible to seek re-election due to term limits. Mahama served as president for four-and-a-half years beginning in 2012 before losing the elections in 2016.
Other prominent candidates include Nana Kwame Bediako, a notable businessman, and Alan Kyerematen, who was formerly the Minister of Trade and Industry and left the NPP last year.
Often regarded as a beacon of democracy in Africa, Ghana enjoys a strong reputation for its electoral integrity, highlighted by consistent and peaceful power transitions since the reintroduction of multiparty democracy in 1992. Based on previous elections, we expect results to be announced by December 10.
According to Alex Vines, director of the Africa programme at Chatham House, the outcome of the election remains unpredictable.
“This election is anticipated to be quite competitive. Earlier in the year, I thought the NDC would win easily. Now, I’m uncertain; a presidential runoff could happen, and while the NDC may do well in parliamentary seats, the NPP might secure the presidency. The truth is that until Ghanaians vote, it’s all conjecture.”
Economy central to contest
The upcoming elections in Ghana have spotlighted several urgent issues, especially regarding economic management, as voters voice their growing concerns about inflation, soaring unemployment, the rising cost of living, frequent power outages, and national debt.
Naidoo points out that a combination of long-standing issues, such as excessive borrowing and public expenditure that led to Ghana’s 2022 default, alongside external global disruptions, have exacerbated financing difficulties, dwindling international reserves, skyrocketing inflation, and a weakening cedi. He emphasizes that a downturn in commodities affecting the cocoa and oil sectors, worsened by hyperinflation at the close of 2022, has left many Ghanaians feeling “drained.”
In May 2023, the IMF authorized a 36-month extended credit facility worth approximately $3 billion for Ghana, which will be in place until 2026. Recently, the fund approved the third review of the program, allowing for an immediate disbursement of around $360 million.
As the program faces regular reviews, it may adapt based on the election results, but both parties are likely to need to operate within its financial parameters.
Given these constraints, the parties are striving to differentiate their platforms. Political analyst Jervin Naidoo from Oxford Economics Africa notes that Mahama’s NDC seeks to increase government spending in social sectors, while Bawumia’s NPP aims to prioritize economic stability through lower inflation and attracting private sector investments.
“In terms of demands and short-term economic impact, substantial changes are unlikely because Ghana’s fiscal policy is restricted by the IMF program,” Naidoo states.
Bright Simons, a Ghanaian social innovator, entrepreneur, writer, and commentator, shares with African Business that the electorate’s emphasis on pressing issues discourages parties from making bold promises for significant reforms.
A tough road ahead
The primary obstacle remains inflation. Consumer prices have risen over the past three months, registering a year-on-year increase of 23% in November, up from 22.1% in October, largely attributed to the escalating costs of basic food items.
The depreciation of the cedi also presents a considerable challenge. The currency has significantly weakened against the US dollar as a result of the economic strains caused by the Covid-19 pandemic, worsened in 2022 when Ghana defaulted on a large portion of its external debt.
Since early 2020, the US dollar has gained nearly 180% against the Ghanaian cedi, which currently trades at around 15 to the dollar, increasing from 11 in May 2023.
Tackling these challenges—while working with the IMF to reform the economy and attract investments—will be a monumental task for the next administration, according to Vines.
“The incoming government will face a formidable challenge in reforming the Ghanaian economy and drawing in new investments for sustainable growth. Politicians often over-promise while underestimating the tough decisions ahead; this is a common scenario in democratic elections. Their pledges need to be critically analyzed.”