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IdentifierCreatedClassificationOrigin
06ACCRA355 2006-02-09 07:24:00 CONFIDENTIAL Embassy Accra
Cable title:  

GHANA AND KUFUOR II: IT'S BEEN A SLOW YEAR

Tags:   ECON GH PGOV PREL 
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R 090724Z FEB 06
FM AMEMBASSY ACCRA
TO RUEHC/SECSTATE WASHDC 0434
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC 0546
RUEKDIA/DIA WASHDC
					  C O N F I D E N T I A L SECTION 01 OF 03 ACCRA 000355 

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/02/2016
TAGS: ECON GH PGOV PREL
SUBJECT: GHANA AND KUFUOR II: IT'S BEEN A SLOW YEAR

REF: ACCRA 345

ACCRA 00000355 001.2 OF 003


Classified By: PolChief Scott B. Ticknor for reasons 1.5 d and e.



1. (C) The first year of President Kufuor's second term
brought achievements in management of the economy and in
Ghana's growing international role. However, it was also
marked by growing inertia and confrontation. Major
distractions included repeated corruption allegations and
competition among Cabinet members to be the NPP's
presidential candidate in 2008 Political tensions are high
in a debate over passage of the Representation of the People
(Amendment) bill, which would allow Ghanaian citizens
residing abroad the right to vote. We need to help Ghana
regain momentum. End summary.

2005 in Retrospect: Some Achievements


--------------------------





2. (SBU) President John Kufuor completed the first year of
his second term and his fifth year in office on January 7,


2006. His most significant achievement in this year is no
doubt Ghana's buoyant economy. Sound policies, including
halting progress on petroleum deregulation, have been
bolstered by significant debt relief, record inflows of donor
funds and remittances, and good cocoa and gold prices.
Reforms boosted tax receipts, there was significant road
construction, and the GOG's budget was relatively
investment-friendly.



3. (SBU) Kufuor also used the year to further strengthen
Ghana's international prestige. He is rightly proud of
Ghana's position as the first country to submit itself to the
African Peer Review Mechanism, (which cited many areas for
improving governance), although the GOG's plans for follow-up
and implementation are unclear. In 2005, Ghana gained
membership to the board of the International Atomic Energy
Agency and a non-permanent seat on the UN Security Council,
and continued its (sometimes quiet) role in reducing regional
conflict. Kufuor narrated a Discovery Channel program to
promote Ghana and traveled extensively overseas.

But A Growing Sense of Inertia


--------------------------





4. (C) Nonetheless, the President's focus was on
consolidating his legacy, not on bold initiatives. He spent
much of the year distracted by corruption allegations,
including allegations against him and his staff, and
responding to heightened media and civil society concerns
about corruption. With the exception of bills on trafficking
in persons and petroleum deregulation, parliament made little
progress on domestic legislation over the past year.
Kufuor's candidate for NPP chairman lost in this year's
internal party election and there is growing tension within
the NPP and among the reputed 13 contenders who have emerged
for the NPP presidential ticket, most of whom are in the
Cabinet. There has been no progress in resolving the ethnic
conflict in Dagbon, in the Northern Region. The GOG has made
little progress on privatization (and in some ways seems to
be backtracking), or financial or public sector reform. Many
donors are frustrated over the failure of the government to
prioritize or provide clear direction in implementing
development policies and strategies. In some areas, social
services have deteriorated.

And Confrontation


--------------------------





5. (C) President Kufuor and the NPP appear determined to
pass the Representation of the People (Amendment) bill, which
will give the franchise to Ghanaian citizens residing abroad.
Referring to this law, Minority Leader Albin Bagbin told the
media after the President's State of the Nation speech, "If
he wants to plunge the country into chaos so be it!" There
is no spirit of compromise on this issue. A coalition of
opposition leaders met with PolChief on January 30 to outline
their concerns about the bill. They question how the bill
will define Ghanaian citizenship, and doubt the voting can be
credibly organized overseas. They question the priority of
funding overseas voting and worry that expatriate voters may
use law suits to force the Electoral Commission to implement
the bill even without adequate oversight provisions.
Fundamentally, they suspect the GOG plans to rig an overseas
voting process managed by its Embassies abroad. They predict
social unrest over the next few years if the majority NPP

ACCRA 00000355 002.2 OF 003


pushes the bill through parliament, which in their view it
appears determined to do without dialogue.



6. (C) The Minister of Parliament and Majority leader Felix
Owusu Adjapong told PolChief on January 31 that there was no
compromising on this bill, which he claimed former President
Rawlings had once supported. The threats of violence by the
opposition were not credible and exposed them as "terrorists,
like Bin Laden," he said. He conceded they could use
parliamentary procedures to oppose the bill, but "I'm not
going to make it easy for them." Minister of Interior Papa
Owusu Ankomah, who introduced the bill when he was Attorney
General, told PolChief the bill would pass and the opposition
was not in a compromising mood. NPP National Organizer Lord
Commey told PolChief on February 2 that he personally opposed
the bill because the NPP was not organized to win in overseas
balloting. However, the Majority leader was determined to
pass it, in response to demands over the years from
expatriate Ghanaians who feel their remittances to Ghana
should entitle them to exert their constitutional right to
vote. Commey criticized the President's authoritarian style
on this and other issues and was worried the NPP party is
losing support because the GOG has not met expectations on
many issues. While he predicted the NDC would oppose the
People's Representation bill with demonstrations on the
streets, he did not believe the average Ghanaian cares much
about the controversy.

NDC in Disarray


--------------------------





7. (C) Kufuor may benefit from disarray within the
opposition NDC, which lacks votes to get its way in
parliament. The NDC suffered internal party divisions
following a contentious party congress in December. NDC
leaders have long claimed there is anger within their ranks
and they are deeply suspicious of the government. It remains
to be seen whether they and other opposition parties have the
ability to rally large numbers against the Representation of
the People's bill or whether they will become violent. Over
the past year, NDC rallies have been small-scale and
peaceful. For the moment, the opposition is limiting itself
to disruptive language in parliament and to legal action. On
February 6, the Fast Track High Court dismissed an NDC
injunction which argued the bill should be rejected because
it is being discussed more than the stipulated three months
after being introduced.

Comment


--------------------------





8. (C) Heading into 2006, Ghana remains a stable democracy
with solid economic performance and a strong regional
leadership position. Kufuor clearly sees the expected
signing of the Millennium Challenge Account compact as one of
his major achievements for the coming year (his mention of
MCA got loud cheers during his State of the Nation speech.)
We had hoped Kufuor would use the honeymoon period of this
fifth year in office -- following a good election and
benefiting from significant debt relief -- to move
aggressively forward on reducing poverty and fighting
corruption. Instead we have seen greater centralization of
power, slow movement on many reforms, and a degree of
complacency. Despite the GOG's impressive macroeconomic
performance, most Ghanaians have not seen a change in their
level of poverty. There are persistent rumors that the
President might reshuffle his Cabinet, which could help him
refocus. We need to help Ghana regain momentum. Otherwise,
the coming year could very well be a repeat of 2005, with
political distractions and confrontation undermining Ghana's
economic and democratic achievements.
















ACCRA 00000355 003.2 OF 003



















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