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SECTION 1 2 3
WHAT CAN BE DONE
2.1
A TALE OF TWO FUTURES
The Economist 1 April 2040
GHANA:
MELTDOWN TO MIRACLE
The world’s top egalitarians arrived in Accra this
week for the inaugural meeting of the Progressive
20 (P20) countries. Ghana, which has been instrumental
in establishing the new group, is keen to show off its
impressive credentials on redistribution and development.
Many of the visitors will linger for a few days of tourism,
not least because of Ghana’s largely crime-free streets.
Leaders convening today will look back to the 2015 ‘oil
curse crisis’, when a power grab for the nation’s newly
discovered hydrocarbon reserves threatened to tear the
country apart. They will start by commemorating those
who died or were injured in the 2015 riots that triggered
the country’s New Deal.
Hundreds died in that conflict, spurring politicians and
ethnic leaders, marshalled by the legendary Daavi Akosua
Mbawini (dubbed by many as ‘Ghana’s Gandhi’), to draw
back from the brink. The 2016 elections that followed
saw the cross-party Alliance of Progressive Citizens (APC)
take power, backed by a multi-ethnic coalition of Ghana’s
vibrant people’s organizations. The APC promptly embarked
on what has become a textbook case in development.
Advised by Norway and Bolivia, the new government
negotiated a sizeable increase in oil and gas royalties,
and introduced an open, competitive tender process for
exploration and drilling. But it did not stop there. Learning
from the experiences of other oil booms, Ghana put 40
percent of oil revenues into a heritage fund, so that future
generations could share in the benefits of the windfall
(production is already falling from its 2030 peak). Proceeds
from the government’s famous victory over Swiss tax
havens at the International Court of Justice also swelled
the fund’s coffers.
The government followed this with the introduction of
progressive direct taxation – taxing the richest to pave the
way for the end of the oil period and to rebuild the ‘social
contract’ between government and governed.
The APC used this new income for a classic exercise in
nation-building, helped by the return of many highly skilled
Ghanaians who flocked home from the capitals of Europe
and North America. By 2017, the country had achieved
universal health coverage and primary and secondary
education. It invested in an army of nurses, doctors and
generic medicines that today make the Ghanaian National
Health Service the envy of the world. They moved swiftly
on to upgrade the quality of education, pioneering some of
Africa’s most successful vocational and technical training,
and building some of the continent’s best universities.
Oil money paid for roads and hydroelectric dams, allowing
Ghana to avoid risky ‘public–private partnerships’, which
decades on are still draining national budgets across the
rest of Africa.
Ghana is particularly proud of its pioneering ‘Fair Living
Wage’ policy, which tied the minimum wage to average
wages, and then ratcheted up the pressure on inequality
by moving the minimum from an initial 10 percent of the
average to an eventual 50 percent. The Fair Living Wage
has since become one of the membership criteria for
the P20. Other positive steps delivered huge benefits
for women, not least Ghana’s Equal Pay Act.
The APC also made ‘getting the politics right’ an explicit
priority. Temporary affirmative action campaigns rebooted
Ghana’s political system, filling parliament and the civil
service with the best and brightest among women and
ethnic minority groups. Citizens and their organizations
were involved from the beginning (for example in the
recent ‘Be a Responsible Citizen, Pay your Tax’ campaign
that rejuvenated Ghana’s tax base).
Now a retired elder stateswoman, Daavi Akosua Mbawini
says her country has gone from ‘meltdown to miracle in
one generation’. For once, the political rhetoric is justified.
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