Economy needs major rethink

Ms. Hannah Tetteh

Ghana's economic development needs a major rethink.

That is the summary of discussions and exchanges at the first Ghana Economic Forum (GEF) convened by the Business & Financial Times in Accra on Thursday.

While the forum recognised that there is quite some good news to report about the economy -- such as its strong growth, price stability, policy reforms, and the promise of its new-found oil resources -- it said there is still a gaping development gap, reflected in low education, poverty, inequality, poor infrastructure, and joblessness.

“If we are going to make our industrial policy work, if we are going to create jobs, and if we are going to diversify our economy, then we need to rethink some of the assumptions that we have about the economy,” said Ms. Hannah Tetteh, Minister for Trade and Industry, who set the tone for the deliberations with an appeal to delegates for non-partisan, objective submissions.

She said the first fundamental shift required is a change in the structure of the economy. For too long, Ghana has depended on a few primary commodities -- cocoa, gold, bauxite, and now oil -- for the sustenance of the economy.

This must change if the country is to get different results, she said, pointing out that oil should become a catalyst for the industrial transformation and structural change needed.

Association of Ghana Industries (AGI) President, Nana Owusu Afari, agreed that the economy needs to be industrialised.

The government should take a stand for industrialisation of the economy and engage private-sector partners to design a strategy for industrialisation, he said.

“Government should listen to and work with the industrial sector, which has continually pointed to the factors -- high taxes, expensive credit, import competition and others -- constraining their growth.”

Dr. Joe Abbey, Executive Director of the Centre for Policy Analysis, said successful and competitive economic production in Ghana is ultimately about lowering the costs of businesses. “We should therefore be thinking always of policies that lower the cost of production for businesses.”

Ms. Tetteh said value-addition to the country's raw materials need not begin at the level of finished or final products.

With its vast agricultural and mineral resource potential, Ghana can create value-added intermediate goods -- whose production fuel significant job-creation and the income from which is less volatile compared to primary commodities -- to feed global supply chains, she said.

She said a second fundamental shift required in the economy should be increased formalisation of its structures to capture the 9 million-odd people who live and work in the informal sector.

Ghana also needs to rethink and revamp agriculture to, first and foremost, feed itself and then create a base for industrial expansion, delegates said.

Because agriculture is hindered by land use and availability, the country needs to resolve completely all the bottlenecks to acquiring land for productive use, the forum said, asking the government, parliamentarians, and the private sector to work in concert with land custodians -- who are mainly chiefs and traditional authorities -- to free up as much land as is available for economic production.

Other ideas offered by the forum to turn agriculture around included harvesting natural water while building irrigation systems and technologies to achieve year-long agricultural production.

Delegates advised that the training of agricultural manpower must be stepped-up because the sector, like any other, needs appropriate knowledge and skills to boost productivity and the quality of yields.

On job-creation, Dr. John Kwakye, Senior Economist at the Institute of Economic Affairs (IEA), said: “In the short-term, the government may be able to help; but job-creation in the long-term should come from the private sector. Therefore, they need a lot of support from the government.”

Nana Owusu Afari said a mismatch between graduates' skills, and the requirements of industry is partly responsible for unemployment among the youth. He called for the institutionalising of industrial and practical training for school graduates through the establishment of a Secretariat that coordinates such training between schools and industries.

On the wider issue of education, delegates said Ghana should target 100% literacy for its population, and part of the oil revenues should be directed into investments towards the realisation of this goal.

They said the country should not leave any child behind in the quest to build human capital for development, urging the state to ensure that the estimated 50% of Ghanaian children who are not in school be made to go.

Foluso Phillips, Executive Chairman and Founder of Phillips Consulting Group, said Ghana should have a value proposition that clearly defines what it stands for and what it wants to become, which would mean rallying behind a singular vision for the future.

Nana Owusu Afari therefore recommended the formulation of a national vision that all political parties will tap into to develop their manifestos and programmes.

He asked the government to depoliticise and resource the National Development Planning Commission (NDPC), the body responsible for thinking ahead for Ghana, to achieve its mandate of creating a national vision and supervising all policies and strategies targetted towards the realisation of the vision.

The theme for this year's GEF was “Integrating People, Systems and Technologies for Sustainable Economic Development”.

Speakers and delegates comprised economists, academics, business leaders, senior corporate executives, representatives of think-tanks, diplomats, and representatives of international institutions.