Between the Lines: Who’s Afraid of the Big, Bad Downturn?

The temptation right now for anyone writing in Ghana is to pick up a pen and wax lyrical about some aspect of the election or its aftermath. After all, the elections – all the way up to last week’s inauguration - had all the trappings of an epic: heroes, villains, tension, action, high stakes, lies, betrayal… pretty much everything besides romance.

For my first piece however, I thought I would do something that I will do a lot in this weekly column: deviate from the norm to provide an alternative take on items you should (but may not) hear about elsewhere in the media.

Although my grandfather was someone Aretha Franklin would call a preacherman, I am by no means a prophet. However, it does not take magical powers to be able to foresee one thing looming over Ghana’s immediate future. Whether you choose to call it, the Global Financial Crisis or the Global Economic Downturn, just don’t call it a recession! Oh, and make a note of the capital letters because it is that big a deal.

While I feel bad for all those people directly affected by it, it was difficult as an African not to sense some kind of poetic justice at play when Wall Street went up in smoke late last year. Western governments and institutions used nationalisation and the protection of their markets as tools to strengthen and grow their economies. Yet when countries like ours tried doing the same, we were held at economic gunpoint with aid conditionality and forced to hand our markets over to the same forces that – unregulated and unchecked - have today resulted in Western governments having to buy out banks and rescue entire industries. Back in the day this would have been called nationalisation, something so fundamentally evil that economic exorcists would have been immediately sent in, wielding suits and briefcases like cassocks and crosses. Today such interventions are called ‘economic bailout plans’ and they are met with sombre rounds of applause. How the times change.

Out here in Africa we have been watching it all like an audience sipping drinks, nibbling on popcorn and enjoying a movie at the Mall. For once, the fact that we are not directly exposed to European and American financial markets is an advantage. Who would have thunk it? Tune into the international news stations and you will hear about the thousands of jobs being lost week after week in Europe and in the United States. Friends who did not make it to Ghana last Christmas blamed their inability to afford airfares on something called ‘the Credit Crunch’: a sudden reduction in their access to loans and credit. To a Ghanaian like me, loans are already hard enough to access, borrowing is an exchange between friends and credit is something you load onto your mobile phone. ‘Credit Crunch’ sounds like some new cereal the purchase of which entitles you to free units.

While businesses in the UK keep closing down, Ghana remains a nation in a state of growth. People here are opening new businesses, big and small: not shutting them down. Although in many cases the jobs just are not there in the first place (something for the new Government to look into), few who have jobs are losing them and certainly not on the scale that we are seeing across the Atlantic.

So who’s afraid of the downturn? Africa analysts, that’s who.

My alma mater - the same School of Oriental and African Studies (SOAS) that nurtured the likes of Professor Adu-Boahen, Samia Nkrumah and our brand spanking new President – produces them by the tonne: well-meaning non-Africans who have made it their life’s work to know more about Africa than the people who live and die here. Have no fear: I am not about to launch into a diatribe about the lack of African ownership of African knowledge. That is another story for another column.

The prevailing opinion among all the talking heads is that 2009 is the year that Africa will begin to experience the political and social effects of the global downturn. Take aid, for example. It was hard enough squeezing it out of the Great Eight when the money was blowing around in the wind. Today commitments made in merrier times towards meeting millennial goals are looking shakier than someone going “BRRRRRRRR!!!!!!” in a Coca-Cola advert. Personally I have always favoured improvements in our trading position over aid, but I have the comfort of living in a stable country with little need for emergency assistance: who am I to talk?

Ghana may have struck black gold but as Russia’s Vladimir Putin recently put it, “the era of cheap gas is over.” Someone may need to send that particular memo around again, because the last one seems to have missed both the Ghanaian people and our optimistic new government. That aside, the fall in demand (from countries including African’s supposed great new ally China) will apparently not be limited to oil but will probably extend to many more commodities. Great…

To top it all off, remittances are set to fall too. Ghanaians who protested so vehemently against ROPAB remain unaware of the contribution that Ghanaians abroad make to the Ghanaian economy and did not understand the importance of maintaining and rewarding those links. Money sent home by Ghanaians abroad so vastly outstrips all aid combined from all foreign donors that it accounts for a chunk of the Gross Domestic Product. Yet we flock to the airport to mob George W. Bush. Karma has a sense of humour and with jobs abroad being cut left, right and centre, it seems likely that there will be a fall in those remittances. Serves us right.

It is not all doom and gloom though. Like I said, we are a growth market situated on a continent which is itself growing and so although that growth is predicted to slow down this year, the good news is that it will not stop altogether. Let our politicians not use the downturn as an excuse: life can get better.

In these hard up times, that is cause for considerable celebration.

Happy New Year.