Ghana: Atta-Mills wins close election

Published:  15 January, 2009

Many in the international media watched Ghana’s election in December 2008 head into a run-off with grim expectations. With more than a touch of melodrama, the press had declared these to be the most important polls in recent African history, with Ghana acting as a Litmus test for the continent’s democratic future.

A major oil find off the Ghanaian coast in the summer of 2007 added a new economic dimension to the race, and allowed the pessimists to predict that the “curse of resources” would now strike the election. Indeed, coming at the end of a year which had, for many, been seen a low point in African governance, Ghana’s election was, by association, conducted under a pall of international pessimism.

Incumbent president John Kufuor of the New Patriotic Party had completed his constitutionally-permitted two terms, garnering praise for his handling of the economy. Mr Kufuor took office in 2000, replacing Jerry Rawlings in a closely fought election with Mr Rawlings’ vice president, John Atta-Mills.

Mr Atta-Mills contested the 2004 elections as the candidate for the opposition, the National Democratic Congress party, again losing narrowly to Mr Kufuor, and, at the age of 64, was again chosen to head his party at the 2008 polls. The ruling NPP fielded Nana Akufo-Addo as its candidate.

In the run-off, which ended dramatically with the decisive votes being cast in the rural constituency of Tain, Mr Atta-Mills triumphed at his third attempt. Although there were isolated accusations of intimidation and vote-rigging, the international community was quick to praise the smooth running of the election.

“Ghanaians can and should take pride in this democratic achievement,” a spokesman for United Nations Secretary General Ban-Ki Moon said. “With their continuing show of commitment to the democratic process, Ghana and its leaders are setting an admirable example.”

International pessimists have, for the time being, been silenced. As Thomo Kaime, head of the Africa division at political risk consultancy Exclusive Analysis, says: “I think Ghana is getting to be boring, but then boring is good… this wasn’t an election based on policy. It was mainly the personal differences between the two contenders. There’s not much to separate the two in terms of economic or social policy.”

Ghana, with significant iron ore and gold deposits, a growing IT sector and a great deal of agricultural promise, has a history of welcoming international investment and is widely regarded as one of the most stable markets for foreign direct investment. Its stock market has, like many around it, suffered from a lack of liquidity in recent months, but was, before the global economy stuttered, emerging as a destination for institutional money. The change of government should not do much to dent that reputation, Mr Kaime says.

“I don’t expect significant changes in terms of how the government deals with foreign direct investors,” he says. “Particularly because most of the policies that were being followed by President Kufuour were partly developed during the time when Atta-Mills was vice president. So we’re not going to see a lot of change in terms of how they deal with that aspect.”

“There may be some renegotiation of contracts or concessions in mining, but again, there’s not going to be a wholesale review, it’s maybe tweaking a few concessions that have been issued. I think Ghana prides itself as being very investor friendly, and it would like to be a model democracy in West Africa. We are likely to see the permissive investment climate continue.”

Mr Atta-Mills has said that modernising the agriculture sector is likely to be a major focus for his government, although Mr Kaime says that the likelihood is that oil will be an overriding preoccupation. Policies proposed by the outgoing president, such as the creation of an oil fund for investment in infrastructure, will probably remain on Mr Atta-Mills’ agenda, although, with the oil price falling to pre-2007 levels in 2009, and other commodity prices remaining depressed, the new government’s spending may be curtailed.

“When oil prices were high [Mr Atta-Mills] had this great vision for revolutionising the agricultural sector, but that may not work out according to his plans,” Mr Kaime says. “Suddenly there is not as much money as they have projected there would be. So yes, there is going to be pressure in three or four years if not a lot gets done. Granted, Ghana’s revenues are going to improve, but not by the margins that they had hoped.”

The fall in other commodity prices might also stretch the new government’s spending plans, according to Mr Kaime. “The economy is going to be diversified somewhat with the oil, but that is also subject to the vagaries of the international commodities market,” he says. “The fortunes of the economy are going to rise and fall depending on how prices are happening on the world stage. There’s not a significant industrial base, and that’s something that the government may perhaps wish to look at. I think the reason they were trying to focus on agriculture was to start from there and then to build manufacturing around food and other agricultural output.

“They have great investment regulations, but then investment regulations don’t get you FDI,” Mr Kaime adds. “That has been coming in, but not at the levels that would sustain spectacular growth… The economy will plod on, you don’t see much that’s spectacular, but it will hold firm. Last year Ghana’s stock exchange was one of the best performing in the world. This year it will perform well, but not as spectacularly as it did last year, because of the problems in the global financial sector.”