IMF and USA set to ruin Ghana 111


Just ten years ago, Ghana had the most reliable electricity supply in all of Africa and the highest percentage of households connected to the grid in all of Africa – including South Africa. The Volta River Authority, the power producer and distributor was, in my very considerable experience, the best run and most efficient public utility in all of Africa. Indeed it was truly world class, and Ghana was proud of it.

Obviously the sight of truly successful public owned and run enterprise was too much of a threat to the neo-liberal ideologues of the IMF and World Bank. When Ghana needed some temporary financial assistance (against a generally healthy background) the IMF insisted that VRA be broken up. Right wing neoliberal dogma was applied to the Ghanaian electricity market. Electricity was separated between production and distribution, and private sector Independent Power Producers introduced.

The result is disaster. There are more power cuts in Ghana than ever in its entire history as an independent state. Today Ghana is actually, at this moment, producing just 900 MW of electricity – half what it could produce ten years ago. This is not the fault of the NDC or the NPP. It is the fault of the IMF.

Those private sector Independent Power Producers actually provide less than 20% of electricity generation into the grid – yet scoop up over 60% of the revenues! The electricity bills of Ghana’s people go to provide profits to fat cat foreign corporations and of course the western banks who finance them.

Indeed in thirty years close experience the net result of all IMF activity in Africa is to channel economic resources to westerners – and not to ordinary western people, but to the wealthiest corporations and especially to western bankers.

Not content with the devastation they have already caused, the IMF and the USA are now insisting on the privatisation of ECG, the state utility body which provides electricity to the consumer and bills them. The rationale is that a privatised ECG will be more efficient and ruthless in collecting revenue from the poor and from hospitals, clinics, schools and other state institutions.

Doubtless it will be. It will of course be more efficient in channelling still more profits to very rich businessmen and bankers. I suspect that is the real point. That privatised utilities bring better service and cheaper prices to the consumer has been conclusively and forever disproven in the UK. What it does bring is huge profits to the rich and misery to the poor. To unleash this on Ghana is acutely morally reprehensible.

Ghana has a political culture in which the two main parties, NDC and NPP, heatedly blame each other for their country’s problems. But if they only can see it, in truth the electricity sector has been ruined by their common enemy – the IMF and World Bank. I pray that one day the country will escape the grip of these bloodsucking institutions.


111 thoughts on “IMF and USA set to ruin Ghana

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  • Kojo Anan

    Craig. Why did Ghana need “some temporary financial assistance (against a generally healthy background)”? isn’t that a romanced, masaged and nuanced terminology for us screwing up? Who forced us to go to them? If, against sound advice and caution, you allow mosquitoes to feast on you and you contract malaria, you will go to the doctor. Although the doctor may treat you to get better, he/she will also think about how much money you will pay for the services. Nothing is free. He/she will get paid whether you get well or not. In fact he/she will get paid even if you die.Is it not sad that in going back to the IMF this time, the government claimed that we were only going to them for “policy credibility” and that all that we are implementing are “home grown policies”?

    And so that,, I think is the missing link, the disconnect, in your note. You do not address WHY we neded the “temporary financial assistance” when we had a “generally healthy background.” We gotta admit to ourselves that we screwed up, royally and big time. No one owes us a free lunch.

  • craig Post author

    Kojo Anan

    Ghana was hit by three things utterly beyond Ghanaian control. The first was a collapse in commodity prices, affecting both oil and cocoa. The second was the world financial crash which resulted in much reduced remittances. The third was the changing rainfall pattern that reduced output from the Akosombo Dam. So no, I do not think Ghana should blame itself unduly for having encountered temporary financial strain.

  • Friday

    Hi Craig, well this is an interesting piece but its hollow. Its not rich in factual analysis, any of those propaganda bloggers can make this accession in Ghana. Yes I believe the IMF is just a blood sucking institution but I believe Mr Murray can do better.

  • Delalorm

    “Ghana was hit by three things utterly beyond Ghanaian control. The first was a collapse in commodity prices, affecting both oil and cocoa. The second was the world financial crash which resulted in much reduced remittances. The third was the changing rainfall pattern that reduced output from the Akosombo Dam. So no, I do not think Ghana should blame itself unduly for having encountered temporary financial strain.”

    Craig,

    There have been government inefficiencies for a couple of years too. Aside the obvious reason you state above, this government has not controlled spending, has awarded dubious contracts that ended up costing the country millions in judgment debts and poorly executed work. Also, the introduction of the Single Spine Salary Structure for public sector workers threw the government’s books out of balance. I grew up with the Volta River Authority as both I and my father worked with the Authority. On the point of it being inefficient today because of the IMF-forced split up, you made no truer point.

  • Damien

    Thank you Craig Murray for standing up for Ghana. I would have doubted this if someone said a British man would care so much about Ghana to publish such an article. You have enlightened us. It is now up to the government to disentangle us from this snare.

    Thank you for standing up for Ghana

    From Damien in Ghana

  • Y. Fiagbedzi

    I have read a few of the comments yet I don’t see any mention
    of culpability of our leaders!
    Don’t be surprised if it turns out that they are a part of the problem.
    They collect taxes from the wretchedly poor and share it among themselves
    in the form of salaries, ex-gratia, etc. They collude with foreigners to rape us.
    They are what Kwame Nkrumah calls local hirelings!!
    If they did not empty the coffers of Ghana, the need to go to the IMF would not
    have arisen.

  • Daniel Appiah

    Dear Craig, I am a Ghanaian who lives in Accra. I will be very happy if you can throw a bit more light on exactly how the introduction of the “private sector Independent Power Producers” has resulted in the current disaster of power failure.

    I don’t trust the World Bank and the IMF because they are not santaclaus. However, I have also been bitterly unhappy about how ‘the Electricity Company of Ghana (ECG), a limited liability Company wholly owned by the Government of Ghana’, and largely ‘responsible for the purchase and distribution of electricity in the southern part of Ghana’, has managed the mobilization of its own revenues from citizens like me who consume electricity. Let me tell you why. Fore more than one year, a friend and I had to chase the ECG to come and collect money for the electricity that we had consumed for over two years! Do you think that this was the fault of the World Bank and IMF? Let me know. I have moved to a new house and the ECG has supplied me with electricity for the past 3 months but nobody has come to my house to collect the money. And I am also tired of chasing the ECG to come and collect their money. Is it surprising that “over 60% of the revenues” collected by ECG goes to pay those private sector Independent Power Producers who “actually provide less than 20% of electricity generation into the grid”? I suspect that the ECG does not collect enough of its revenues. And I think that if the ECG is run by competent people, and freed from unnecessary government interferences, don’t you think that a smaller percentage of their revenues will go to the private power producers?

    I think you are aware that Ghanaians generally lack a culture of ownership of public resources, particularly state owned enterprises. Give me a good reason why I should not support privatization of state owned enterprises. In fact, I will support any effort to privatise the collection of electricity revenues if I am convinced that a large part of that money will end up in infrastructural development.

    I humbly and eagerly await your further explanation.

  • Paa Kwesi

    Bonafide Ghanaian here. I find considerable issue with the first paragraph:
    “Just ten years ago, Ghana had the most reliable electricity supply in all of Africa and the highest percentage of households connected to the grid in all of Africa – including South Africa. The Volta River Authority, the power producer and distributor was, in my very considerable experience, the best run and most efficient public utility in all of Africa. Indeed it was truly world class, and Ghana was proud of it.”

    Craig, I do not know who/what your sources are, but I can tell you that for majority of Ghanaians living in Ghana, the above statement is FAR from true. Ghana has Never had reliable electricity supply since as far back as the 1980s! Electricity distribution and management by the various Ghanaian governments over the past 3 decades has been below-average at best! Sorry but Nowhere near ‘world class’, as you put it. It may be the “best in Africa”, but that is really not saying much.
    We have had many episodes of nationwide power cuts and rationing since I was in kindergarten! (i’m 29 now). At least 1 out of every 3 years sees a serious power crisis. It is almost considered strange in many parts of the capital if a household sees continuous power for more than a few days straight.

    I understand that some terms and conditions put forth by international bodies like the IMF and World Bank may not be too favorable. However, it is not hard to see why a beat-up and frustrated government like ours will be willing to consider any and every possible option out there.

  • Odartman

    Craig, you have once served in Ghana and know the thinking and lifestyle of the Ghanaian politician. Because they are equally corrupt and would only serve their personal interest, they team up with the blood suckers to milk the masses. Those are the agents of the Brettonwoods institutions in the country. Afterall who determines the price of gold, cocoa, oil…same blood lovers. I am not surprised at all with the move to privatised ECG. Our leaders will surely succumb to it because of the bailout. This week, the IMF released a statement praising Ghana for doing well in its economic recovery programme. But what is the reflection on the people? More hardship. Thanks for the good work Craig. Continue to expose the rot and wickedness in global governance.

  • Samuel Soshie

    I saw this criminality coming. I think my advice to my friends to go for solar is now justified. Thank God mine has just arrived at the port for clearing. I am investing in borehole to get my own water. I cannot allow these blood suckers to rob me.

    Our leaders are ready to sell us to anyone, if their dreams will be fulfilled.

    Let my people rise up against these people, if not, these people will suck the last blood in us.

    Thank you Craig for opening our eyes to the truth.

  • ENOS DOGBEY

    Ghana’s power sector problem is that of manpower. The expert technicians developed over the years have been reminirated very poorly over the years of their hard labour. The young upcoming techs have decided to be engineers leaving their jobs undone. No more experts. No more expert mtce

  • Kwesi

    Africa has been vulnerable to the trappings of the IMF because of our bankruptcy in our politicians who have no intention whatsoever to do anything for the people who put them in power. They only come to office to put in place arrangements that will benefit them and the rest can go to hell. Those in power are not affected in anyway by implementing the policies prescribed by their so-called expects from the West. Fuel prices, electricity and water tariffs have gone up severel folds since the beginning of the year making life unbearable. Indeed wemay be getting into deeper crises than Greece.

  • John

    Craig,
    I`m a Ghanaian and i stand to testify this article.. Our Electricity supply was in good shape and Only God knows what happened, Now there is a load shedding of Power supply across the country. Its so disgusting and frustration, come to think of it, how do Private state corporations survive in a 24hrs of lights cut consistently. Well, you probably have only 12hrs of light supply. this shedding has been in routine for over some years now and no one knows who to actually blame. Politicians get on the media just to throw dust into our eyes. By reading this article I think, if my leaders can stop partisan propagandize governance, and focus on avoiding these bloodsuckers Western Bankers and Rich western cooperation, My Ghana will be Okay!
    Today we experience the highest ever recorded depreciation and worst ever exchange rate. The Al-Jazeera describes the Ghanaian currency as the useless currency on planet earth. My homeland that used to be filled with Gold and diamonds, and so many natural resources, now can`t finance its self project but have to run to this Blood suckers for help.
    I believe Ones we learn to appreciate the little we have and avoid selfishness, every tax-payer is gone enjoy the byte of the national cake.

  • Nii Danso

    Craig. I am not going to blame anyone for our woes. We opened our asses and got fucked. I blame us. and our society and our ruling class who accept all the shit that the west hands to us. If we can start to think a teeny bit. actually use our brains, no one would dare do that to us. Once we take care of our biz’ness, the rest will fall in place. this writing is populist. We shoulda been thinking into the future. The VRA could be evaluating population data, thinking of renewal energy resources and reforms in the energy sector to evolve into the future. its a simple matter of poor planning on our part. We deserve this until we begin to think.

  • Michael J.K. Bokor

    As a Ghanaian public intellectual, I consider Mr. Murray’s viewpoints as shallow and unrepresentative of the realities underlying the energy crisis in Ghana and his hasty conclusion that the USA and IMF are set to ruin Ghana. I will say a lot more in an opinion piece to dissect Mr. Murray’s assertions.

    Of course, the role of the IMF in the affairs of developing or underdeveloped countries is interpreted in diverse ways, depending on where one is situated to see that role. The overarching impression, though, is that the IMF and its affiliate (the World Bank) are more interested in worsening problems of needy countries than helping solve them, especially regarding their stiff conditionalities that impose more hardships on the people as subsidies get eliminated.

    The records also show that the IMF and World Bank were established for specific purposes, based on the specific agenda of those behind them. Ghana has dealt with both for many years (even including the concession given it in 2001 when the Kufuor government bowed to pressure to declare Ghana a HIPC member and the country was “forgiven” debts.

    Now, here is my beef with Mr. Craig’s stance. Can one base the influence of the USA and IMF on only one sector of national life to conclude that they are set to ruin the country?

    Historically, we know that Britain colonized and exploited the territory now called Ghana before being forced out on Thursday, March 6, 1957. What specifically did Britain put in place for the country’s energy sector to avert the crisis that has engaged Mr. Craig’s attention this way?

    In truth, the Nkrumah government went to the United States for a loan from Kaiser Aluminium Company to construct the Akosombo hydro-electric project, which led to the establishment of the Volta River Authority. Why didn’t Nkrumah go to Britain?

    And in the light of happenings in Ghana today regarding the energy sector, what has Britain done?

    I hope that my response will bring Mr. Craig back into the conversation so we can tease out the nitty-gritty to know what we have to know and move on instead of the rabble-rousing that I see in his stance. Mr. Craig can reach me at [email protected] for further interaction. Thanks.

  • Yaw

    The point made in this article is valid and so we were against the very fact that our government had to turn to the IMF. The IMF is a bank which has the interest of its funders at heart not the struggling economies. Our economy in Ghana has been recklessly managed over the past six years. Funds meant to improve our electricity sector had been redirected leading to our current state of unreliable electricity. Large sums of money has been paid by government as damages under dubious circumstances and as well as hugely overstating costs to the state. All of these monies could have been used to improve our infrastructures to spur economic economic growth but I think the drops of oil money got he government confused.

    As mention above our electricity supply in the hands of a foreign entity whose only aim is to make money scares me to death. Ghana as you know was on course to overcome poverty but the gains are being reversed.

    Whether NPP or NDC, all we ask for is prudent management of our economy but that has not happened in the past six years and even worse in the last three.

    Our leadership has been reckless and lazy in every step they have taken. The results;

    1. high unemployment
    2. failing health system
    3. increased corruption
    4. financial insecurity among the middle and lower income homes
    5. worse of all rising crime rate.

    As proven in countless publications, only a handful of countries that went under IMF and World Bank programs had shown positives economic indications. Our economic managers at least had these antecedents to refer to but they chose the easy path for them but in reality tough on the populace.

  • Bismark Yankson

    Mr. Murray,

    I kinda agree to some extent with you. But the real blood suckers are our ruling class. What makes you think certain politicians in Ghana do not benefit from the blood sucking process?

    Point is, Africa is full of greedy bastards, (as former President Flt. Lt. Jerry John Rawlings said). That greediness has been the loophole that collapes our public sectors. The politician only thinks of what shall come into his pocket so will succumb to any nonsense the IMF and World Bank will bring up.

  • Anthony Pile

    Oh dear, I don’t think Craig is quite right with the evidence he has wielded against the IMF although we have sympathy with the idea that the supranational should not be asking the Ghanaian government to follow all its advice. The idea that the $1bn loan needs to be used to bolster the currency cannot be right when all this does is make imports more attractive in an economy which makes very little for home consumption and virtually nothing for export. Oh, and, Craig, electricity has been in woefully short supply for at least two decades, but that is what one might expect of an emerging nation’s economy.

  • prince

    The fault doesn’t rest only with the IMF and world bank but the selfish African leaders who only think about the kickbacks they will receive from the corporations and businessmen.

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