The Parallel Economy

Last Thursday, in the balmy humidity of my cocoa farm, with only my thoughts  for company, I turned on the radio. In far away Accra, the Minister of Finance was reading the budget for the next fiscal.

Big impressive figures rolled off his tongue about our economy and I am sure that if I lived outside Ghana, I would have been impressed. Very impressed. The problem was that after 44 years here on earth, listening to his many predecessors from the NPP, PNDC, previous governments and previous decades, I couldn’t help wondering how totally detached the figures were from the economy I participated in.

You see, I have always been convinced that in Ghana we have had a two track economy. In other words a two tier economy. One economy for the rich few and the other economy for the poor many. I happened to belong to the bottom tier economy. Driving under the Tetteh Quarshie overpass, it hit me that the top tier economy was like a railroad of wealth, suspended above and well out of the reach of us in the bottom tier economy. We in the bottom economy could see the money circulating on the tracks above but try as we could, we could not participate in that economy. Occasionally, those on the railroad above us, would throw us a few scraps from the economy above and we would scramble for the scraps below.For me, poor but educated cocoa farmer from Breman Asikuma, the most important thing was that the impressive figures reeling off the Ministers tongue applied to the economy upstairs. GDP growth, reduction in inflation . . that couldn’t apply to us down here.

Lemme explain why. My cocoa trees nestle under the protective shade of numerous plantain trees. My cocoa of course get captured by the suits in Accra because I get paid with an Akuafo Cheque. Cocoa feeds the economy on the railtracks above so it was too important not to capture. Not so for the plantain under whose shade my cocoa nestles. Periodically I harvest my plantain and haul it to the roadside. On nominated days, trucks come from Accra, Assin Fosu, Swedru and Akyim Oda to purchase my plantain. I am paid cash for my plantain. The buyers do not issue a receipt, neither do they request an invoice for my plantain. There are millions of other farmers like me, repeating the same transaction for various food items, plantain, yams, cassava, tomatoes, garden eggs. I wonder how on earth these transactions can be captured accurately or even estimated accurately by those in suits or political suits in Accra. They can’t because these foodstuffs are part of the parallel economy running at ground level.

My Uncle in Germany sent me a Benz bus to use as a passenger bus between Asikuma and Mankessim. However this vehicle plies the route between my house and the workshop far more than it does the route to Mankessim. I spend a fortune buying parts and paying the fitter. The fitter does not give me an invoice and neither does he issue receipts. I multiply my Benz bus by the many passenger buses out there in Ghana and wonder how on earth these transactions could be captured or estimated by the suits or political suits sitting in their air conditioned offices and Land Cruisers in Accra. They can’t because these spare parts and fitters fees are part of the parallel economy running at ground level.

I nearly forgot to add that when the Benz bus was on its way to Ghana, my uncle sent me some Deutschemarks to use to pay for duty and clearing when it landed. He sent it through someone flying in, so I travelled to Accra and went to the Airport. As soon as I picked up the money, I walked down to the Airport roundabout and changed it into cedis. No receipt, no invoice, just pure cash. Come and capture this transaction Mr Economist. You can’t because it is part of the parallel economy. Meanwhile travel to South Africa and see if you can change a single dollar without producing your passport. Come to Cow Lane in Accra and the volumes of forex traded there will stun the suits.

I think if you have survived to this point in my monologue, then you are beginning to get my point. There is simply a category, a whole load of economic transactions that run parallel to the formal economy of this country. The suits are aware of this and I am sure that with the best intentions, they try to factor it into their calculations of the Gross Domestic Product and Inflation et al. But they can’t.

If we were in a court of law, their submissions or postulations would be thrown out of court for lack of hard evidence. In a similar but less drastic vein, I, the humble cocoa farmer from Breman Asikuma, will accept the budget from the esteemed Finance Minister, with a pinch of salt from the Songhor lagoon. Because when it comes to the parallel economy, they are simply not part of it. We are.