Mahama's 24 Hour Economy vs Bawumia's Credit Scoring System

As Ghana approaches the 2024 general elections, the presidential candidates from the National Democratic Congress (NDC) and the New Patriotic Party (NPP) have introduced their flagship policies to address the nation's economic challenges.

Mahama’s “24-Hour Economy” and Bawumia’s “Credit Scoring System” offer distinct approaches to tackling Ghana’s economic hardship and unemployment. Let's analyze these policies and evaluate which might be more beneficial for Ghanaians given the current economic climate.

John Dramani Mahama’s 24-Hour Economy

Mahama's 24-Hour Economy aims to keep the economy active round the clock by extending business hours and encouraging operations throughout the night. This initiative is expected to boost productivity, create jobs, and enhance economic activities.

Key Components:

1. Public-Private Partnerships:

   
   
   • Collaboration with the private sector to drive economic activities.
   • Provision of tax incentives to businesses operating during extended hours.

2. Stable and Low-Cost Electricity:

   • Ensuring stable electricity supply at lower costs during peak hours (nighttime).
   • Attracting businesses to operate during these hours due to reduced operational costs.

3. Enhanced Security and Transportation:

   • Investment in security infrastructure to ensure safety during night-time operations.
   • Development of a reliable public transportation network to facilitate movement during late hours.

Potential Benefits:

• Increased Employment: More jobs available for different shifts, potentially reducing unemployment significantly.
• Economic Growth: Higher productivity and increased business activities contribute to overall economic growth.
• Improved Services: Extended hours in essential services like healthcare can improve quality of life.

Challenges:

• Security Concerns: Ensuring safety during night hours may require significant investment.
• Infrastructure Costs: Upgrading infrastructure to support 24-hour operations could be costly.
• Social Impact: Potential disruption to social and family life due to shift work.

Dr. Mahamudu Bawumia’s Credit Scoring System

Bawumia's Credit Scoring System aims to establish a comprehensive credit scoring mechanism that enables individuals and businesses to access credit based on their financial history and behavior. This system is designed to improve financial inclusion and stimulate economic activity by making it easier for people to obtain loans and credit.

Key Components:

1. Digitalization Agenda:

   • Building on the successful implementation of the National Identification (Ghana Card) and Addressing System.
   • Leveraging digital tools to create a standardized credit scoring system.

2. Financial Inclusion:

   • Easier access to credit for individuals and small businesses, promoting entrepreneurship and business growth.
   • Encouragement for people to participate in the formal financial system.

3. Economic Stimulus:

   • Increased availability of credit can stimulate economic activities, enabling more investments and consumption.
   • Support for small and medium-sized enterprises (SMEs), which are crucial for job creation and economic development.

Potential Benefits:

• Enhanced Financial Access: More people and businesses can access credit, leading to increased investments and economic activity.
• Support for SMEs: SMEs, often the backbone of the economy, can grow and create more jobs with easier access to credit.
• Formalization of Economy: Encourages people to maintain good financial behavior, contributing to the formal economy.

Challenges:

• Implementation Complexity: Setting up a robust and fair credit scoring system can be challenging.
• Data Privacy: Ensuring the security and privacy of individuals’ financial data is critical.
• Initial Exclusion: Those with no or poor credit history may initially find it difficult to benefit from the system.
• Low Participation: Due to high unemployment rates, many people may lack the financial stability needed to participate in the credit scoring system effectively.

Comparative Analysis of The 24 Hour Economy vs Bawumia's Credit Scoring System

Economic Impact:

• 24-Hour Economy: Immediate job creation and economic activity boost, particularly beneficial for addressing unemployment.
• Credit Scoring System: Long-term economic benefits through increased financial inclusion and support for SMEs, though initial participation may be low due to high unemployment.

Feasibility:

• 24-Hour Economy: Requires significant investment in infrastructure and security but can have visible short-term impacts.
• Credit Scoring System: Requires setting up complex systems and ensuring data integrity, with benefits more evident in the medium to long term.

Addressing Unemployment:

• 24-Hour Economy: Directly creates jobs through extended business hours, making it a strong candidate for addressing immediate unemployment concerns.
• Credit Scoring System: Indirectly supports job creation by empowering businesses, which can lead to employment growth over time.

Social and Economic Inclusion:

• 24-Hour Economy: Provides immediate opportunities for a wide range of people, including those in lower-income brackets.
• Credit Scoring System: Promotes long-term financial inclusion, benefiting those with access to financial services but may initially exclude the currently unemployed population.

Rating the Policies in Order of Priority

24-Hour Economy (John Dramani Mahama)

Priority: High

Reason: Given Ghana's current economic hardships and high unemployment rate, the 24-Hour Economy policy offers the most immediate and direct benefits. By extending business hours and encouraging round-the-clock economic activities, this policy can create a significant number of jobs and boost productivity quickly. The focus on public-private partnerships, tax incentives, stable and low-cost electricity, enhanced security, and improved transportation infrastructure makes it a comprehensive approach to addressing immediate economic needs.

Credit Scoring System (Dr. Mahamudu Bawumia)

Priority: Medium

Reason: While the Credit Scoring System has the potential to revolutionize financial inclusion and support long-term economic growth, its impact may be less immediate compared to the 24-Hour Economy. The success of this policy hinges on the existing digital infrastructure and financial stability of the population, which could be hindered by the current high unemployment rate. Nevertheless, it lays a strong foundation for future economic resilience and should be considered a vital component of Ghana’s long-term economic strategy.

Conclusion

In the current economic context, prioritizing the 24-Hour Economy policy is crucial for addressing immediate unemployment and economic activity. However, integrating aspects of the Credit Scoring System will ensure sustainable growth and financial inclusion in the long term. Therefore, while both policies are important, the 24-Hour Economy takes precedence as the most urgent solution for Ghana’s pressing economic challenges.