...on Economic Statistics

After a careful study of the statement by the flag bearer of the New Patriotic Party (NPP), Nana Akufo-Addo, at the launch of his presidential campaign on 13th March, 2008, the Convention People’s Party (CPP) wishes to make two important observations for the benefit of the general public.

What the 2008 elections are about

While we recognise the many sacrifices and contributions that Hon. Akufo-Addo has made towards Ghana’s democratic development, we deem it unfortunate that he would seek to reduce the 2008 elections into a contest between the NPP and the National Democratic Congress (NDC). Ghana is bigger than any party and we do submit that the elections would be as much about the NPP’s record as it would about the records of other parties that have governed this country before. And that certainly includes the CPP, whose exceptional record of successful nation building and national development in the face of internal and external threats remains the touchstone for measuring the performance of governments in Ghana and beyond.

We call upon Ghanaians, therefore, to disregard any notion that the 2008 elections would be between only the NDC and NPP; it will not. Indeed, popular sentiment around the country indicates that the electorate, having seen the 8-year record of each of the two parties, are ready to welcome back the CPP to complete its unfinished business of building a just and prosperous society, a society free of all manner of deprivations, social strife and injustices, and political animosity.

The NPP’s economic record

In his statement, the NPP flagbearer made a number of claims about the Ghanaian economy and his party’s management of it that were inaccurate, to say the least. We deem it our moral duty to set the record straight as part of our contribution to a healthy and useful debate in this election season.

Nana Akufo-Addo: NPP has “nearly quadruple[ed]” the size of the Ghanaian economy “from a GDP of US$3.9 billion to about US$15 billion today.”

CPP’s Response: According to the NPP’s first budget statement in 2001, Ghana’s nominal GDP in 2000 (that is the total size or value of the Ghanaian economy unadjusted for inflation) was ¢27.15 trillion. With an annual average exchange rate of ¢5,456 to the US dollar in 2000, that would translate into about US$4.9 billion – a whopping US$1.0 billion higher than Mr. Akufo-Addo’s figure.

We must point out that while it has become convenient for government officials to convert cedi figures into dollars at will, such conversions can and do often lead to the wrong conclusions and claims. The US$4.9 billion cited above, though higher than Nana Akufo-Addo’s claim, actually represented a decline from US$7.8 billion in 1999. This happened because the cedi lost half of its value against the US dollar in 2000. However, when measured in cedis, instead of dollars, Ghana’s nominal GDP actually increased from ¢20.58 trillion in 1999 to ¢27.15 trillion in 2000 (or, GH¢2,058 million to GH¢2,715.2 million), a nominal growth rate of 31.9%. Over the same period, as reported in the 2001 budget statement, real GDP grew by a positive 3.7% - a clear reason why we should be careful in translating cedi statistics into dollars for political convenience.

Nana Akufo-Addo: In the last seven years of the National Democratic Congress, US$320 million was invested in manufacturing. In the first 6 years of NPP rule, US$2.3 billion has gone into manufacturing.

CPP’s Response: This is perhaps the most disputable claim in the NPP flagbearer’s statement. Given the near-collapse of the manufacturing sector under the NPP, the question that arises from this claim is: Which government agency invested this money, and in what industries? The public deserves to know.

Available government data shows that despite the NPP’s incessant proclamations of a “Golden Age of Business,” the manufacturing sector – more than any other – has suffered severely over the past 7-8 years.

According to the Ghana Poverty Reduction Strategy (2003-2005), p.38, the manufacturing sector in 2000 accounted for 9.02% of GDP; by 2004, this had declined to 8.75%. The government’s 2008 budget statement, p. 36, states that manufacturing’s share of GDP in 2007 was 8.1% of GDP. The same budget statement tells us that in 2007, the manufacturing sector in fact posted a negative growth rate of 2.3%. This was the first such negative growth since 1983!

This is not all. Data from the Bank of Ghana’s Quarterly Economic Bulletin shows that in 2000, the manufacturing sector accounted from 28.1% of business credit; by September 2007, this had declined to 14.5%. The manufacturing sector under the NPP is clearly in a melt-down mode. (We attach for the benefit of journalists, some of the industrial/manufacturing accomplishments of the CPP, some of which survive till this day, despite attempts by successive governments to destroy them).

Nana Akufo-Addo: In 1993, Ghana’s daily minimum wage was equivalent to 96 US cents. By 2000, the last year of the NDC regime, the real value of the minimum wage of the Ghanaian had reduced to 60 US cents. Today, the minimum daily wage, at 2.24 Ghana cedis, is equivalent to US$2.34.

CPP’s Response: First, we believe that since the minimum wage is not paid in dollars, it is needless and misleading to insist on quoting it in dollars in order to score political points. However, since the NPP’s claim was made mostly in US dollars, we shall address it in dollars, too, and then turn to the issue in Ghana cedis as well.

With a daily minimum wage of ¢790.0 and an annual average exchange rate of ¢648.90 to the dollar, the US dollar equivalent of the daily minimum wage in 1993 was US$1.22, not 96 US cents, as claimed by Hon. Akufo-Addo. By 2000, as the cedi rapidly lost value, the dollar-denominated minimum fell to the nominal equivalent of about 77 US cents (that is, a minimum daily wage of ¢4,200 and an average annual exchange rate of ¢5,455.5 against the US dollar).

Measured in Ghana cedis, however, and adjusted for inflation using 2008 prices, the minimum wage would be GH¢1.67 in 1993 and GH¢1.47 in 2000, reflecting a decline of 12.0%, not the 37.5% implied in Hon. Akufo-Addo’s claim.

The CPP’s record on the daily minimum wage, as one would expect, is far better than that of the NDC or the NPP, as shown in the table below. Corrected for inflation, the minimum wage of 65 pesewas in 1966 would be worth ¢30,429.9 today (or GH¢3.04).

Simply put, the minimum wage in the last year of the CPP government can today buy 35.7% more goods and services than would the NPP’s minimum wage of GH¢2.24 and more than double what the minimum wage in 2000 could buy. This is yet another indication of the superior economic management record of the CPP.

Indeed, while both the P/NDC and NPP have struggled unsuccessfully for nearly 30 years to raise Ghana to the ranks of middle-income countries with a per capita income of US$1,000, the CPP did so in less than a decade. The per capita income of US$240.0 in 1966 is worth US1,536.00 in today’s prices, making Ghana a middle-income country under the CPP. The CPP’s economic management record can therefore not be wished away by anyone through falsehoods and cynical omissions.

The CPP is a force to reckon with in this election.

 Ghana’s daily minimum wage since 1966
 (Measured in 2008 prices in Ghana cedis) 
 1966 (CPP)	2000 (NDC)	2008 (NPP) 
 GH¢3.04	        GH¢1.47	          GH¢2.24 

Source: Computed by Research & Manifesto Committee of CPP, using data from Government of Ghana, Bank of Ghana, World Bank, and Ghana Statistical Service

Time and space will not permit us to document other instances of outright misrepresentations in Nana Akufo-Addo’s speech and various claims by the government. Suffice it to say that while the CPP will remain focused in crafting and selling an alternative message of hope and prosperity to Ghanaians, it will also be vigilant about claims made by the NPP or any other party in this critical season in our political lives. We shall run a campaign of ideas, facts, and truth – as has always been our tradition.

Forward Ever! Backward Never!