Despite the intensive economic overhauls and the democratisation of the political process since 1992, the standard of living in Ghana continues to fall to abysmal levels. On the agricultural front, we still witness cheap, subsidised meat, wheat, rice and corn pouring from the developed nations into a country endowed with enough resources to feed itself. These imports often compete unfairly with domestic production. The rich developed countries battle for new markets to sop up their surpluses from heavily subsidized agricultural practices, while putting barriers to exports from developing countries. Developing countries continue to attract large sums of development aid most of which end up in the hands of African politicians, some of whom still supervise over regulation, poor farming techniques and bad roads and hence prevent African farmers from getting enough to the market. The continent is therefore far from food self-sufficiency despite the fact that over 50% of the people are farmers. The advent of true democracy in Ghana should herald a new era of peace, unity and prosperity for a country so rich in natural resources and manpower. The country is suffering from the absence of a strong private domestic sector as an impetus for economic growth. Private domestic investment in Ghana should be seen as a contributor to economic growth, employment generation and a catalyst to attract foreign investment. The problems in the private sector however need to be sufficiently addressed before it can play the practical role the government envisages for it. In developed Western Economies the private sector has the capital, the skill base and profit incentive to act as the main driver of their economies. This leaves governments to do what they do best, mainly as a regulator for the public good. It is not unusual to have publicly listed private corporations have budgets, skill manpower and managerial competence far in excess of most governments. Trusting such a highly developed sector with one of the fundamental pillars of economic policy is a prudent choice. In developing countries however, leaving the private sector as the main engine of growth is neither wise nor prudent and the outcomes for such a policy will be a mere empty sloganeering. The main reasons being: 1. Governments still remain the main reservoir of capital in comparison to individual citizens or private corporations in developing countries. 2. Industrialisation requires a highly educated and technically skilled workforce. The private sector in developing countries has neither the resources, the competence nor the incentives to create the large pool from which the workforce can be drawn. An alternative approach for developing countries such as Ghana will be a middle approach that recognises the weaknesses in the private sector and the inherent but largely undeveloped strengths of the public sector. A Strategic Partnership Consumer confidence or consumer spending is a universally accepted driver of western economies. It simply means that it is in everyone’s best interest that anyone willing to work will have access to a job. Jobs for all, has a multiplier or domino effect on the economy. It translates into more revenue from an enlarged pool of workers’ income taxes and more revenue from taxes on company profits. It also means individuals have an enhanced ability to purchase or spend money which ensures that businesses stay profitable. Availability of jobs and thus job creation should become the main focus for accelerated development. In developed economies, government financial assistance in the form of low interest loans, grants, bonds, tax incentives and employee training are usually enough to birth and sustain infant or struggling industries. In developing countries this is usually inadequate due to overwhelming inadequacies and systemic failures in the structures required for running and sustaining infant industries. Public and private sector partnership in business birthing is therefore required. Business Birthrate Strategy Increasing the business birth-rate will be fundamental to the success of the NPP Government’s election promise of jobs for all. Leaving this fundamental element of economic policy to a private sector which is largely undeveloped will be a colossal mistake. Suggested Strategy The Government must set up a competent, no-frills task force purposely to birth new industries and to sell them off. An initial approach will be the purchase of whole manufacturing businesses which have come on the auction market in developed countries for a fraction of their cost. With purchase depending on technicians coming over to install and train local staff. [An example: See Graysonline.com.au] The Government should go into joint ventures with well-established industry giants in the developed countries with an undertaking to sell government’s share of the business at a later stage. This provides confidence and certainty to new entrants into the local economy. There is the need for policy-induced incentives that will revive indigenous private investors in Ghana. The revival could lead to higher efficiency of resource use which will serve as a positive signal to attract foreign investment. The NPP Government is showing a commitment of restoring internal and external balance and has been supportive of private businesses. However, the government’s efforts are constrained by the deterioration in public utilities. The non-availability of utilities, communication and social services imposes heavy costs and shifts resources away from the productive private sectors. Government policies must therefore be credible and sustainable in the long run to allow the private sector to commit to investment projects that will promote growth and development. Eric Owusu Sekyere and Henry Antwi Sydney, Australia
Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."
Reproduction is authorised provided the author's permission is granted.