GHANA'S PRESIDENT KUFUOR DELIVERS STATE OF NATION

UNCLAS SECTION 01 OF 02 ACCRA 000345

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON GH PGOV PREL SOCI
SUBJECT: GHANA'S PRESIDENT KUFUOR DELIVERS STATE OF NATION
ADDRESS


1. Summary: President Kufuor's January 31 State of the
National address reemphasized his government's commitment to
human resource development, private sector development and
good governance. It highlighted the GOG's macroeconomic
successes while pressing for passage of the Representation of
the People bill which will enable overseas Ghanaians to vote.
His and the ruling NPP party's support for this bill has
greatly heightened political tensions in Ghana. End Summary.

Economic Successes
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2. (U) In his annual State of the Nation address delivered
on January 31, 2005, President Kufuor highlighted the his
government's macroeconomic successes as "the toast of the
international community." For the first time ever, the GOG
submitted the 2006 budget before the end of the calendar
year, as required by the constitution. Annual GDP growth is
6 percent but needs to be 8 percent for Ghana to achieve
middle income status by 2015. In the past two years, $7
billion in GOG debt was canceled and the government created
250,000 new public sector jobs. (Note: we calculate that
GDP growth is between 5-6 percent and debt relief will total
around $4.5 billion, not the $7 billion figure he used. End
note.) Kufuor highlighted the GOG's revival of the VALCO
aluminum plant. (Note: Kaiser Aluminum sold its share to
the GOG after an investment dispute. End note.) Kufuor also
cited other new investments: Fruitier of France,
Anglogold-Ashanti and Newmont mining companies, Maersk (which
plans to build a large container terminal in Takoradi),and a
consortium of investors looking at reviving Ghana's railway
system. He hoped the Millennium Challenge Account (MCA) and
the West African Gas Pipeline (WAGP) would be on stream this
year.

Human Resources and the Private Sector .
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3. (U) Kufuor highlighted three priorities: human resource
development, private sector development, and good governance.
On human resource development, he detailed the GOG's support
for teacher training and social service delivery, including
affordable housing. On private sector development, he noted
that a venture capital fund is now operational, and that a
contract for a national identity card is about to be awarded.
While the private sector is the "main engine" for growth,
the GOG would step in when needed to safeguard national
interest, as it did with VALCO and the telecommunications and
textile sectors. The 2007 50th anniversary jubilee requires
a focus on more tourism infrastructure.

Governance
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4. (U) Ghana is proud to be at peace and to be the first
country to undergo a peer review under the NEPAD African Peer
Review Mechanism (ARM),Kufuor said. He acknowledged a
perception that the GOG was not doing enough to fight
corruption. He responded that the GOG has quadrupled the
budget for anti-corruption institutions since 2001. In an
unusual move for a president, he had offered to appear before
the Commission on Human Rights and Justice (CHRAJ) to respond
to a corruption charge, but the accuser failed to prosecute
the charge. The media should take corruption allegations to
the police or to the Office of Accountability, Kufuor said.
He criticized "certain websites" for their negative coverage,
which was undermining Ghana's international image, adding "we
must be careful not to let people who do not subscribe to the
tenets of democracy take advantage of the freedoms guaranteed
thereunder to subvert democracy." Kufuor also stressed his
priority of refurbishing Flagstaff House as a replacement for
Christianborg Castle, the current seat of government, using a
concessional loan from the Government of India.

5 (U) Kufuor also affirmed it was time to move ahead with
the Representation of the People (Amendment) Bill, which will
enable Ghanaian citizens living abroad to vote. Parliament
could debate the law and the Electoral commission could
decide when and how to implement it, but this law had been
discussed since 1996 and should be passed, he said, adding
that those who opposed the law "must have an unwholesome
motive to the protest, to which the country should be
alerted." He also endorsed passage of the Whistleblower and
Freedom of Information bills.

Comment
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6. (SBU) The President underscored the continuity in his
priorities and his economic successes, but was short on new
ideas and sharpened Ghana's political divide. His attack on
the Ghanaweb website reflects some growing concern about
intimidation of the media. Many in the opposition question
Kufuor's priority focus on relocating the presidency using a
large Indian loan, saying it is too expensive and
unnecessary. Kufuor's strong support for the Representation
of the People bill (backed by strong body language from him
and his party leaders during the speech) brought angry jeers
from the opposition in parliament, who shouted "we want
peace." They view the bill as an attempt by the ruling party
to rig the 2008 elections. This major controversy could
distract the GOG from its economic and political agenda (as
we will report septel.)
BRIDGEWATER