GHANA: General election campaign carries localised violence risks, but incumbent is likely to be re-elected despite recent corruption allegations


President Nana Dankwa Akufo-Addo is likely to be re-elected on 7 December, signalling policy continuity over the next four years. However, recent corruption allegations against his administration have stained his reputation, which may reduce the National Patriotic Party’s (NPP) legislative majority. In turn, this may undermine his next government’s ability to pass legislation over the coming four years.

In 2016, the NPP and Akufo-Addo ran a successful election campaign, pledging to combat government corruption and improve the country’s macroeconomic outlook by attracting investment, stabilising the cedi, and reprofiling debt through commercial credit.

Allegations of corruption and bad government

Shortly after taking office in January 2017, Akufo-Addo’s administration launched a review into large-scale capital spending by the previous administration, led by his main opponent, John Dramani Mahama. While the government managed to renegotiate the build, operate, and transfer (BOT) contract with UAE-based Africa Middle East Resources Investment Group (AMERI Group), which had been considered over-priced by USD150 million, the new deal has also been highly criticised by civil society organisations who say the new contract will cost the Ghanaian tax payer USD935 million over 15 years. Although the government has continued to boast about its successes, the sacking of then-energy minister Boakye Agyarko, who had been in charge of the talks, proved highly embarrassing to the government.

The resignation on 16 November of the  special prosecutor, Martin Amidu who accused the government of failing to ensure his independence and freedom of action, has further undermined Akufo-Addo’s reputation for fighting corruption. The Office of the Special Prosecutor (OSP) is a corruption watchdog established by Akufo-Addo's administration in 2017. Specifically, the OSP in October submitted a corruption risk assessment into Parliament’s so-called Agyapa Royalties Agreements – which include the establishment of a special purpose vehicle (SPV) intended to buy the bulk of the royalties from the country’s gold mining operations, in a bid to raise non-debt cash.

The OSP’s report, which was submitted to the president on 15 October, raises concerns about the fact that the SPV will be registered in Jersey, a British secrecy jurisdiction, ahead of its listing on the London Stock Exchange. It also flags the expedited approval process (completed within 24 hours) by the finance ministry, and the choice of Databank Ghana – a company co-founded by Minister of Finance Ken Ofori-Atta – as the company’s local financial advisor.

The adverse macroeconomic impact of the pandemic

Over the past four years, the Ghanaian economy has been among the 10-fastest growing in Africa, presenting annual real GDP growth rates of more than 6 per cent. In addition, inflation has halved from 17.4 per cent in 2017 to 7.7 per cent in 2019, according to World Bank data, and the exchange rate of the cedi against the US dollar had stabilised. Furthermore, through the reprofiling of government-guaranteed debt, its share of GDP has progressively declined from close to 73 per cent in 2017 to 62.8 per cent in 2019.

However, that was all before the outbreak of the COVID-19 pandemic, which has added significant strain to the economy and exacerbated indicators, in part due to crashing crude oil prices. Growth is projected to decline to 1.5 per cent, while debt-to-GDP is anticipated to reach 76.6 per cent of GDP, according to the International Monetary Fund. Although economic growth is forecast to recover in 2021 and the following years, the deteriorated outlook is likely to prompt credit-rating downgrades and hamper access to finance in the coming four years.

A weakened opposition and localised security threats

Although Mahama’s National Democratic Congress (NDC) party will be the NPP’s main opponent this year, the party is unlikely to win this year’s election due to a loss of support over the past four years and high levels of confidence in the current administration. Indeed, the Centre for Democracy Development think tank’s pre-electoral survey in October gave the NPP an advantage of 15 percentage points.

While Ghanaian election campaigns are comparatively much more peaceful than in neighbouring countries, such as Côte d'Ivoire, there have been incidents of localised violence, including fighting between political supporters.

In late October, NPP and NDC supporters faced off in the Jamestown area of Greater Accra, throwing bottles and other projectiles at each other, leaving at least 15 people injured. The use of vigilante groups by some political leaders is also a recurrent problem in Ghanaian elections, and is likely to increase over the coming weeks as the election campaign intensifies. This poses an incidental risk to bystanders who should increase their monitoring of local election rallies and campaign activity.

Forecast and advice

While recent corruption allegations will taint Akufo-Addo’s legacy, they are unlikely to lead to a change in government, in part due to improved macroeconomic indicators over the past four years. The election campaign will feature localised incidents of violence but is unlikely to translate into widespread unrest. Staff and operations managers should monitor local campaign activity and factor these into operational and travel plans over the coming four weeks.

In the medium term, investors should anticipate a moderate to elevated risk of debt arrears, due to currency fluctuations and mounting debt, while sovereign-credit downgrades are likely to hamper the government’s ability to access finance on commercial markets to reprofile its current obligations as it has done over the past four years.


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BURKINA FASO: Uncertain general election outcome likely to undermine security and stability