The Unique Case of Ghana
The IMF has announced that $144 billion in loans will be required for South Saharan Africa during the COVID-19 crisis, and is beginning to distribute funds and create foregiveness programs for the poorest nations. Their advice to recipients is to “save the receipts”, and expect rapid turn out of funds because of the nature of the crisis.
But the publication Africa News raises an important issue in an article entitled: IMF discloses COVID-19 interest rate on loans for countries in Sub-Saharan Africa. The author and editor poses questions that have been voiced around the continent concerning the conditions of these loans. He reports in the article his interchange with the IMF on the question of the loans: “The IMF disclosed that the interest rate on COVID-19 loans was actually very low. 1.05 percent. The IMF added that repayment would be between 3 1/4 and 5 years.” The author then notes: “In fairness, the 1.05 percent interest rate on the loans for countries in Sub-Saharan Africa is not high, but the problem comes when the money is not well invested and countries default on payment. When that happens, the interest rate skyrockets and may become more than the original loan itself over many years or decades.”
Credit for long term production, or another bubble of debt
In that context, the author poses the question of an alternative to the seemingly limited choice between (1)the lack of assistance during a deadly pandemic; (2)the entry into a decades long debt trap. He says: “Some have questioned the debt being piled up by countries who are getting loans from the IMF and other financial institutions to deal with the COVID-19 emergency. What will be the result of this new debt? Is there another way out, that would actually construct productive medical infrastructure in Africa, and expand education, so the ‘credit’ needed to deal with the crisis leaves behind the means of production to dissolve the debt and keep people alive and healthy now, and in to the future?
“These are some of the questions that have been raised in several reports across the continent.” “Alexander Hamilton” he continued, “concluded his 1790 Report on Public Credit with this caveat: ‘Persuaded as the Secretary is that the proper funding of the present debt will render it a national blessing, yet he is so far from acceding to the position, in the latitude in which it is sometimes laid down, that “public debts are public benefits,” a position inviting to prodigality and liable to dangerous abuse, that he ardently wishes to see it incorporated as a fundamental maxim in the system of public credit of the United States, that the creation of debt should always be accompanied with the means of extinguishment. This he regards as the true secret for rendering public credit immortal. And he presumes that it is difficult to conceive a situation in which there may not be an adherence to the maxim. At least he feels an unfeigned solicitude that this may be attempted by the United States, and that they may commence their measures for the establishment of credit with the observance of it.’”
The Schiller Institute notes that these are exactly the questions that its proposal for a World Health Policy was written to address. Without the global adoption of an economic paradigm which promotes physical productivity and rejects the stranglehold of monetarism and debt, even the best ideas are bludgeoned. However, with such a new paradigm, century old problems can be solved, and a bright future planned.
As of May 27, 2020, Ghana’s figures on coronavirus were: 7,117 confirmed, 237 recovered and 34 deaths. So far, the IMF has committed $1 billion to Ghana through their Rapid Credit Facility. [Country by country IMF commitments for the COVID-19 crisis are listed here.) The IMF has advised its recipients to “keep the receipts”, to be able to show that the loans were all used for the immediate crisis. Can dealing with the immediate crisis be enough to solve problems hundreds of years in the making?
In his eighth “State of the Union” address to the nation Sunday, April 26, Ghana’s President Addo Dankwa Akufo-Addo explained: “There are eighty-eight districts in our country without district hospital. We have six new regions without regional hospitals. We do not have infectious disease control centres dotted across the country and we do not have enough testing in isolation centers for diseases like COVID 19. We must do something urgently about this. That is why the government has decided to undertake a major investment in our healthcare infrastructure, the largest in our history.”
President Akufo-Addo then declared the intention to build 94, 100-bed hospitals across 88 districts in Ghana in the next year. “Each of them will be a quality, standard design 100-bed hospital with accommodation for doctors, nurses, and other health workers.” President Akufo-Addo added that the investment is “the largest” in Ghana’s history.
President Akufo-Addo proposal for assuring that hospitals are available in each region of the country should remind Americans of a better time in their own medical history, when the the Hill-Burton Act held sway. Hill-Burton, passed in 1946 and operant until 1971, required that states guarantee a certain number of hospital beds not only per capita, but also per unit area. The current shut down of American rural hospitals as well as hospitals in poorer areas denies the Hill-Burton model, and is part of the American medical catastrophe.
In the case of Ghana, the President noted the plan to build hospitals as follows: “It will mean 10 in Ashanti, nine in Volta, nine in Central, eight in Eastern, seven in Greater Accra, seven in Upper East, five in Northern, five in Oti, five in Upper West, five in Bono, four in Western North, four in Western, three in Ahafo, three in Savannah, two in Bono East, and two in North East Regions. … and the rehabilitation of the EffiaNkwanta Hospital in Sekondi, which is the regional hospital of the Western Region.” He stated: “We have tended to focus our infrastructure on Accra and one or two of our other big cities. But as we’ve seen, epidemics and pandemics when they merge, can spread to any part of our country.”
What are the numbers showing this concentration? German network Deutsche Welle (DW) reported: “It is estimated that more than two-thirds of the country’s doctors practice in either Accra or Kumasi, the second largest city … The Greater Accra region, which includes the capital, has one doctor per 3,000 people, whereas the Upper East region, one of Ghana’s poorest, has one doctor to 26,000 people. … Ghana’s Northern region makes up around 17% of the population, but only has 7% of the country’s doctors. … ”
In fact, Ghana has one of the highest rates in the world of doctors leaving the country to work elsewhere. The number of doctors trained in Africa and Asia who then practice overseas is a major issue. The Financial Times in 2013 reported: “The number of African doctors working in the US soared by almost two-fifths over a decade, according to a study showing the increasing extent of the ‘brain drain’ from developing nations. More than 10,000 medical graduates born or trained in sub-Saharan Africa were registered to practise in the US in 2011, raising concerns that some of the poorest countries are subsidising medicine in the world’s biggest economy. The figure – up 38 per cent from 2002 – was equivalent to more than the entire number of doctors currently working in Ethiopia, Ghana, Liberia, Tanzania, Uganda, Zambia and Zimbabwe combined. The trend will rekindle the debate over the need for new measures to attract and retain doctors in Africa. Some estimates suggest the continent has only 2 per cent of the physicians practising around the world but a quarter of the global burden of disease.” Forty-two percent of the doctors in the British National Health System are from Africa, Asia and the Middle East.
How then to find the qualified medical personnel to run an expanded health system?
Could the ambitious effort being proposed for Ghana bring part of the qualified diaspora of medical experts back to the country to train a new generation to run the hospitals? Of the population of 30 million, the median age is 21.5 years. President Akuko-Addo was elected in 2016 with a major commitment to education, making all secondary education free for all Ghanians. He has argued that free and high quality education is the key to Africa’s future as well as a means of harnessing the potential and resources of the African diaspora. Wouldn’t such construction create a huge jobs program for the predominantly young population of Ghana?
Still, according to media reports, President Akuko-Addo’s proposal has posed much doubt and consternation. One article entitled “Ghanaians question president’s promise of new hospitals quotes the Deputy General secretary of the Ghana Medical Association, Dr. Titus Beyuo, as telling the press, “If you’re thinking of universal health coverage, then definitely, if we get district hospitals everywhere, it is welcome news. Because the current distribution of health care is very inequitable. [But] we expect a clear policy direction on how to get trained people for those facilities.” He was quoted elsewhere: “Whilst we can build a structure in 12 months or even a week as we saw in China in Wuhan, you cannot do the same with the human resource. … It takes us on the average three to four years to produce a specialist whose regular medical education is six to seven years,’ he said.”
An article entitled “Building 94 hospitals within a year is impossible – Prof. Bokpin“; quotes Prof. Godfred Alufar Bokpin of the University of Ghana as stating: “It is going to be very, very difficult. We all acknowledge that having these hospitals across the country is the way to go, but the timing and the ability to deliver within this period is particularly challenging… Because if you look at the impact of COVID-19 on our revenue, deficits have gone up drastically.” The articles continues: “Demand for Ghana’s raw materials and commodities in China, Ghana’s top exporting partner, has declined since the pandemic hit. Ghana’s government has also said it expects a budget shortfall from the drop in oil revenues and tourism. President Akufo-Addo has not yet given details on how he will fund the hospitals. Ghana’s 2020 budget currently allocates just over 44 million Ghanaian Cedis ($7.6 million, €7 million) for health infrastructure.”
In his April 26th speech, President Akufo-Addo stated: “We make these investments in our health care system, not because it is going to be easy, but because it is self-evidently necessary to serve the needs of 21st century Ghana.
“Three development authorities, this Global Development Fund and the Metropolitan Municipal and District Assemblies will be tasked to place health infrastructure amongst their highest priorities in the coming years. Soon, at the appropriate time, the exact volume of investors required will be duly and transparently laid out for public scrutiny and action. It is obvious that side by side with the investment in the physical infrastructure of our public health system. We will have to intensify our policies for the growth of our domestic pharmaceutical industry so that we can generate our own medicines and medical supplies and products which should no longer be dependent on foreign imports. Further, the National Health Insurance Scheme is currently in a stronger position as a result of the significant reduction in our standing arrears. It is my hope and expectation that this expanded and empowered public health system will be the most enduring legacy of the pandemic. Universal health coverage in Ghana will then become real and meaningful for every Ghanian deserves good health and good health care.”
For more on the idea of creating national credit for development of the physical economy, and LaRouche’s Four Laws on this method, see: https://the-medical-project.com/schiller-inst-proposals/. For more on the Schiller Institute’s ideas on the new paradigm, see the online presentation by Hussein Askary, who keynoted a May 28th conference in a speech entitled: “THE BELT & ROAD INITIATIVE: How to fully unlock Africa’s immense potential.”
In an article entitled: “Experts Sound the Alarm Over the Lack of COVID-19 Test Kits in Africa”, The Guardian writes: : “Parts of Ghana’s virus response have emerged as a model in the region. With a population of 29 million, the country has tested almost 200,000 people, one of the highest rates in Africa. The country has registered 6,800 infections with over 2,000 recoveries, while 32 people have died. Ghana has just five laboratories that can test for Covid-19 but has innovated to improve test levels, running laboratories for 24 hours, using drones to deliver samples from rural areas, and testing multiple samples at the same time.”
ENCOURAGING THE DIASPORA TO RETURN:
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Ghana rolls out the red carpet to encourage resettlement in the motherland