NPP to win 2020 elections – Fitch

• Posted on December 5, 2019December 5, 2019
• by Nana Kwesi Coomson
• Comment

The governing New Patriotic Party (NPP) has been tipped to win next year’s general elections and retain majority in Parliament as well, Credit Ratings agency Fitch has predicted in its latest political analysis of the country.

It said “Given the broad macroeconomic and fiscal improvements that have taken place since 2016 – when the current government assumed power – we believe that the NPP will likely retain the presidency and a majority in the unicameral legislature.”
This it stated suggests that broad policy continuity will remain in Ghana in 2020 and beyond, with flagship government policies such as the ‘One District One Factory’ industrialization policy and the soliciting of extensive foreign investment remaining in place.
Even in the unlikely event that the National Democratic Congress (NDC) regains office, it is unlikely to reverse these policies, at least in the short term, Fitch emphasized.
It explained that there is minimal threat to political stability from the election process due to Ghana’s well-entrenched constitutional norms and institutions, despite a recent alleged ‘coup plot’ that did not pose a serious or systematic risk to Ghana’s political order.
Security threats from political instability and strengthening insurgencies in neighbouring countries however, pose some risks to Ghana.
 The 2020 elections will see incumbent President Nana Addo Dankwa Akufo-Addo against his predecessor John Dramani Mahama from the opposition NDC.
The ratings agency emphasized that the election campaign may bring with it some risk of further fiscal slippages, as the run-up to 2016 saw a hiring spree by the government – seemingly to win voters over – while in 2019 the incumbent government has admitted to missing its revenue targets and expecting a wider budget deficit in 2020.
“It is possible that further fiscal slippage could occur if the government were to repeat its predecessor’s practice of hiring large numbers of new public employees or offering large spending increases or tax cuts in popular areas as the election date nears.”
Ghana expects economic growth to slow and the budget deficit to rise next year as oil production drops off sharply.
Projected growth will fall from 7% this year to 6.8% next year.
The budget proposed a spending rise in 2020 of 21% to GH?85.9 billion which would increase the budget deficit to 4.7% of Gross Domestic Products (GDP) from 4.5% in 2019.
Election will not pose political instability
Again it said that Ghana has well-entrenched institutions compared to most of its neighbours and has a history of several peaceful transfers of power between different political parties since the 1992 constitution was brought into effect.
This limits the chances of a disputed election process, or an unconstitutional change of government, it stressed.
Fitch said there was a ‘coup plot’ organised by a Dr. Mac-Palm that the government claimed to have foiled in September
“However, the narrow base of support for the alleged plotters and the apparent ease with which the plot was foiled suggest that there is no systematic or serious threat of the violent overthrow of the government.
“Likewise, the arrests of some separatists in the Western Togoland region in November 2019 does not necessarily indicate that this secessionist movement poses a serious threat to political stability or Ghana’s territorial integrity.,” it noted.
Some security threats from neighbours
The report said there was a limited but growing series of security threats emanating from Ghana’s unstable neighbours.
“Growing instability in the Sahel region is seeing Islamist groups aligned with Islamic State and Al-Qaeda grow increasingly entrenched and capable.
“These groups have already shown their ability to strike into Coastal West Africa with an audacious kidnapping of tourists in Benin from a base in Burkina Faso in 2019, which suggests a real threat of terrorism for Ghana.”
Indeed, Ghana’s July 2019 Mid-Year Budget Review revealed a sharp increase in security spending to counter this threat, showing both that the menace of these groups is growing and that it can have an impact on Ghana’s fiscal and political situation.
A sign of similar insecurity comes with the arrest of 170 alleged terrorists, drug traffickers and illegal arms traders in a joint Ghana-Togo operation in November 2019.
“Though we do not expect these security threats to seriously destabilise the Ghanaian state, they will nonetheless pose some risks of terrorism and modest risks to the fiscal outlook”, Fitch added.

By Augustine AMOAH, Accra