The Limits of Self-Reliance

by John A. Kufuor (President of Ghana)

Being President of an African nation isn't easy. Fifteen months ago, my government was freely elected to office. No honeymoon period greeted us. Instead, we faced a catastrophic economic situation: runaway inflation, unsustainably high interest rates, a collapsed currency, and a general loss of confidence.

Under the circumstances, my government took hard decisions and took them quickly. We committed ourselves to spending only what we have or can reasonably expect to have. We proceeded with caution and pragmatism in the management of the exchange rate of our currency and our monetary affairs, leading to a measure of stability.

I can claim credit for modest successes, but Ghana needs more than modest successes. Ghana was the first sub-Saharan nation to win its independence from a colonial power, in 1957. Yet the average per capita income of my people is lower now than in the 1960s, a decade after independence. Many of our families subsist on less than one dollar a day. Our galloping rate of population growth overwhelms our schools and hospitals. Endemic diseases threaten us all, but especially our children.

Some of the blame for this we Ghanaians must accept. My country must acknowledge that corruption has been a canker on our public and economic life and must be contained. Corruption distorts the truth and saps the confidence and enthusiasm of Ghana's friends. We know that the fight against corruption is no easy battle, but we have joined that battle and will do our best to minimize corruption as much as possible.

As a country, Ghana needs more trade, but the truth is that we do not have much to trade with. There has been no diversification in our economy over the years. One hundred years ago, our trading was limited to the supply of raw materials, mainly gold, timber and cocoa. One hundred years later, our trading consists of raw materials, mainly gold, timber and cocoa.

Even though we have fertile land, water and hardworking people, somehow we have not managed to master the process of adding value to what we produce and have, as a consequence, been reduced to being at the whim of the world's unpredictable and capricious commodity markets.

Our agricultural practices are ancient and require urgent and wholesale modernization. We pay $100 million a year to import rice we do not grow. Irrigation should be the key to growing all the rice we need and yet we lose opportunities to irrigate. One of our dams, the Kpong, each day sends 5 million gallons of fresh water into the Atlantic despite the fact that on one side of the river the land lies arid and the people are mired in poverty. The same situation applies to other rivers in our country.

The reality of our situation can be spelt out in even more graphic terms. In a globalized world where instant communications drives economic success, Ghana a nation of 19 million people has only 250,000 fixed phone lines. My point is not only to advertise our backwardness, but to explain that at Ghana's current rate of development it is almost impossible to generate the necessary revenues from our own resources to finance our plans and needs.

That is not because my government is not willing or able to do what is required of it. Costs are rising for consumers. Electricity, water, petroleum products and many other consumer basics are seeing double-digit increases, partly as a result of a decrease in government subsidies. Electricity prices, for instance, have doubled, while fuel for cars has risen 64%.

My government is looking for ways to raise revenue to pay for services, but it is unrealistic and even negative to exact more taxes from an already overburdened people. Ghana needs foreign donors to plug the gap in its finances and assist us in standing on our own two feet.

To adapt the Chinese proverb, we want help to learn how to fish, rather than to be given fish for food. We want Ghana to become a beacon in West Africa. We want to show that good governance and growth will help to eradicate poverty and the instability that has characterized our region for so long. We believe the Ghana story can become an example of how, with inspired leadership, a determined people in Africa can transform their country within one generation.

I must admit that Ghana's path towards self-reliance has not been smooth. I am painfully aware that our past can be characterized by one step forward and two steps backward. This time, however, we are determined not to slip up.