How can industrial growth be achieved in Ghana?
Nana Owusu-Afari (in the foreground) “It is time to move from debates to proposals and face the government. Don’t ask what the country can do for you but what you can do for your country!” Association of Ghana Industries (AGI) president Nana Owusu-Afari calls for a paradigm shift in defining the roles of the government and the private sector. He spoke at a workshop of AGI’s National Council where it laid out its strategy to play a main role in facilitating economic growth.
How can industrial growth be achieved in Ghana? The answer is quite simple: through a strong private sector. It cannot be accepted that “the private sector is kept at arm’s length and autonomous bureaucrats issue directives” as pointed out by J.S.L. Abbey, economist and main facilitator of the strategic workshop. Instead, “industrial policy making has to be embedded within a network of linkages with private groups”. Abbey is Executive Director of the Centre for Policy Analysis (CEPA) and former Minister of Finance and Economic Planning.
He emphasized that in an economy “it is still the government leading the way”. But over the years, the various Ghanaian governments have not managed to implement the long term visions they have all advertised. Rather, Ghana’s private sector seems to be running the economy. Nonetheless, in order to enable the private sector to become more competitive and efficient, the government needs to step in to secure property rights, contract enforcement and market stability.
Ghana’s economy still relies heavily on the export of raw materials like cocoa, gold and oil. The country also receives budget support from multiple donors. Abbey posed the rhetorical question of whether Ghana could survive without foreign aid. According to Abbey, the correct approach to improve industrial policy is to lobby for a strategic collaboration between the government and the private sector. “We need to shift our focus away from policy outcomes to the ways that lead to achieve those.” An ongoing sharing of information may aid in creating a valuable learning process for both sides. This in turn could lead to well reasoned and solid policy proposals.
On another note but in the same workshop AGI President Nana Owusu-Afari pointed out that to get access to loans, “we must make ourselves honourable and reliable”. High lending rates ranging between 16.75% and 25.9 % hinder the development of the private sector. The Bank of Ghana concluded in a survey conducted in March 2012 that tight credit lending is caused by “inadequate cash flow to support repayment, weak financial performance and inadequate security”.
“It is about honesty and sincerity” said Dr Abbey. “People need to represent themselves properly when they ask for credit. It cannot be that people apply for loans and subsequently refuse to pay what they owe”, he concluded. AGI calls on its members to work together on the question of credit access to improve Ghana’s credit culture.
“We know the solution, don’t we? The solution is us. So let us get involved and do our homework”, Owusu-Afari proposed in his final statement.