Ghana Elections: Who is better for the economy?

Ghanaians are heading to the polls today to cast their votes for the president and parliamentarians of their choice. With 12 candidates vying for the top job, the focus is primarily on the incumbent President, Nana Akufo-Addo of the New Patriotic Party, and Ghana's former President, John Mahama of the National Democratic Congress. Yvonne Mhango, Sub-Saharan Economist at Renaissance Capital, provided insights on the economic policies of these candidates in a recent interview with CNBC Africa's Kenneth Igbomor. Yvonne Mhango highlighted the current economic challenges facing Ghana, particularly the impact of the COVID-19 crisis on the fiscal situation. The budget deficit is expected to reach around 11% of GDP this year, double the previous year's figure. Despite this, Mhango noted that the ruling New Patriotic Party has shown the ability to implement fiscal reforms and reduce the budget deficit in the past, making them well-positioned for a second term. However, Mhango also pointed out the potential uncertainties that could arise if the opposition were to win the election. A change in power could lead to currency weakness and slower growth recovery due to shifts in policies and investor sentiment. The Ghanaian cedi, which has remained stable this year, may come under pressure in the event of a change in government. Regarding Ghana's economic recovery, Mhango acknowledged that while the country experienced a contraction in the second quarter, the impact was less severe than expected due to a brief lockdown period. She anticipated a sustained recovery in the fourth quarter but warned that a change in power could lead to investor caution and hinder the economic recovery process. Both major political parties in Ghana have emphasized the need for fiscal reforms to address the budget deficit and boost government revenues. While there are concerns about rising inflation and inequality, there is consensus on the importance of containing the deficit and promoting inclusive growth. President Mahama's focus on job creation has resonated with the younger population and is seen as a key element of driving inclusive growth. In terms of the peaceful transition of power, Mhango expressed confidence in Ghana's democratic process, noting that the country's elections are expected to be relatively peaceful compared to other African nations. However, she highlighted that the policy outlook would depend on the election results. Despite the fiscal challenges, Ghana remains an attractive investment destination due to its educated workforce and recent reforms in the energy sector. Mhango emphasized the potential for investment in manufacturing and job creation, which could drive economic growth and reduce dependency on imports. Looking ahead to 2021, Mhango identified the fiscal situation as a key flashpoint for Ghana's economy. The government will need to focus on reducing the budget deficit and managing debt levels to ensure sustainability. She noted the stimulus program proposed by President Mahama's party and raised questions about its financing and implications for the fiscal situation. Overall, the outcome of the Ghanaian elections will have significant implications for the economy, with both candidates offering distinct economic policies and priorities that will shape the country's economic trajectory in the coming years.