Does Ghana Want Growth That Arrives, or Growth That Stays?

Ghanafuor, if we are to avoid the kind of youth demonstrations now sweeping across Europe, we should spend an afternoon studying a cement plant in Tema.

In France it began in September with school students angry about the state of their buildings and their classrooms, and by last weekend hundreds of thousands of people were on the streets, with a nineteenth century tourism office in Lyon set alight.

In Spain and Portugal the young have pitched tents in the capitals over rents they cannot pay. In Milan they fought the police. The grievances differ in detail, but the sentence underneath them is the same: we were told the future was coming, and it has not arrived.

That sentence travels well because it is true in more places than Europe. We should be careful with the comparison, though. The young of France and Portugal are quarrelling over the division of a great deal of wealth that already exists. Ours would be quarrelling over its near absence, which is a different quarrel and a more dangerous one, because a young person who has never been offered a future at all does not negotiate, he burns.

So look at the plant. In the Tema Free Zones Enclave, a joint venture between CBI Ghana, which sells cement under the Supacem brand, and Heidelberg Materials of Germany, has built the largest calcined clay plant in the world. It cost about US$110 million, it can produce more than 400,000 tonnes of calcined clay a year, and it takes its clay from Torgome in the Volta Region. That clay is burned in a flash calciner, blended with limestone from the Eastern Region and with clinker, and turned into a cement that carries a considerably smaller share of imported clinker and considerably less carbon than the ordinary product. It began producing in May last year, and the President formally commissioned it in March, which was the least interesting thing about it.

The interesting thing is the logic, and the logic is the one this country keeps refusing to learn. Ghana has clay almost everywhere and limestone almost nowhere. So we import clinker, which is limestone and fuel turned into a grey pebble at enormous cost in energy and foreign exchange, close to half a billion dollars a year by the industry's own estimate, and then we grind it and sell it as cement. Somebody else captures the value of the chemical transformation. We capture the value of the grinding.

Let me put the general principle plainly, because everything else here rests on it. The worth of a tonne of material is not set by what it is. It is set by how many times it has been transformed inside your borders before it leaves them. A tonne of clay in the ground at Torgome is worth almost nothing to anybody. A tonne of calcined clay is worth something. A tonne of blended cement is worth more. The mineral did not change. The number of steps it took within the country changed, and the income changed with it. Every rich country on earth is a place where a great many steps happen, and every poor country is a place where very few do. That is not a slogan about value addition. It is arithmetic, and it is most of what development means.

Which brings us to the first piece of intellectual furniture that needs to be thrown out, and that is the idea that a country should specialise in what it is naturally good at. We are told, whenever anyone proposes to process anything here, that our comparative advantage lies in our raw materials, and that to do otherwise is to defy economics. This is a serious misunderstanding of what comparative advantage is. It is a description of how trade settles at a given moment, with a given set of capabilities, not a destiny handed down at birth. Every country that is now rich began by refusing its own comparative advantage. Alexander Hamilton's Report on Manufactures of 1791 argued against the obvious, effortless thing America was good at, which was growing crops and shipping them, and in favour of the difficult thing, which was making goods. Friedrich List made the German case half a century later, and his argument came down to this: a nation that exports raw produce and imports manufactures has only one arm, and it is the arm that holds the plough.

The countries that took the advice to stick to what they were good at are still good at it, and still poor. The ones that built the second arm have moved on to being good at something else.

Now the second piece of furniture, which is the fate of import substitution. It has a bad name, and it earned it. Through the 1960s and 1970s it meant protected factories producing shoddy goods for captive consumers, with the losses quietly carried by the taxpayer and the quality never tested by anyone. But notice what that model actually substituted. It substituted outputs. It replaced an imported finished good with a locally made finished good, and it did so behind a wall high enough that quality stopped mattering and the producer captured the consumer's rent instead of competing for it.

Tema is a different animal in three respects. It substitutes a step rather than a product, so the plant sits in the middle of a chain that continues outward into an export market which will not care about our national feelings. It is disciplined by standards rather than protected by tariffs, tested daily in an on site laboratory, with the imported cement still available to anyone who doubts it. And its output is not aimed at a captive domestic market of some thirty million people, which is the trap that killed the old model. To reach scale for a finished good you need customers, and we did not have enough of them. To reach scale for an intermediate input you need the world.

Substitution disciplined by standards is industry. Substitution licensed by protection is merely a subsidy with a flag on it.

The third thing worth saying is the one that almost never gets said, because it is not about money. What accumulates in a country that calcines its own clay is not only a plant. It is people who know how to run a flash calciner, a kiln chemist who can be poached by a competitor, a maintenance crew that can diagnose a fault without waiting for a flight from Heidelberg, a local supplier who learns to hold tolerance. That is technological capability, and it is the only asset a nation possesses that does not deplete. Ore depletes. Money leaves. A skilled maintenance crew stays, teaches, and starts something of its own. Every serious account of how South Korea, Taiwan or later Vietnam moved up the chain comes back to the same thing: the machines could be bought, and were bought, but the capability had to be built, and it was built by doing the work rather than by owning the mine.

The test of the Tema plant, therefore, is not the ribbon and not the investment figure. It is a question to be put to the company with a straight face: in ten years, who is running that calciner? If the answer is a rotating cast of expatriate engineers while Ghanaians sweep the floor, we have bought a plant. If the answer is a Ghanaian plant manager with a Ghanaian shift team, and a few of them have gone off to build competing lines, we have bought an industry.

Which brings us to the contradiction in the middle of our national economic policy, and I would like the reader to hold both halves of it at once. In the same country, in the same year, we are being asked to export raw bauxite from the Atewa hills and import the aluminium made from it, destroying a watershed in the process, while at Tema we are being shown a plant that takes a common local mineral, processes it, and sells it onward at a margin. One policy exports the future and imports the finished thing. The other imports less and keeps the step. We do not lack a strategy. We lack the consistency to apply the good one.

The bauxite case repays the attention, because its central premise is false, and we have already tested it. The premise is that if we do not mine the ore we cannot have the aluminium industry. But the ore has never been our bottleneck. We built an aluminium smelter at Tema in the 1960s, and in the six decades since we have rarely come close to running it at its capacity. We have also already run the experiment of promising to mine Atewa in exchange for the processing. The deferred payment arrangement that would have bought the ore and built the refinery was reclassified as a loan in a government disclosure in September 2024, for the simple and unanswerable reason that the refinery was never built, and Parliament has since spent months approving a restructuring of the whole arrangement. So the choice on offer is not ore now in exchange for a refinery later. It is ore now, and a promise, and a hole in the ground at Atewa, and a loan to repay. The lesson of Tema is that the processing step is the part that sticks, and it is the part that does not require us to destroy a watershed. Any government genuinely committed to an aluminium industry would begin with the three things the smelter actually lacks, which are dependable power, honest management and a processing chain, and it would leave the ore in the hill until those exist.

Then there is the ownership question, which is where sentimentalists and cynics both go wrong. A German company owns half of this venture, and it is worth saying what the other licensed interest in Atewa is: an aluminium company prospecting for bauxite, registered in Amsterdam, with production assets in Romania, China and Sierra Leone. Some will call that a sell out, and some will call it proof that only foreigners can build anything. Both are lazy. The test is not the passport of the capital. The test is where the decisions are taken, whether the engineering and chemical skills accumulate in Ghanaian hands or leave with the expatriate consultant, whether the profit is reinvested here or extracted, and whether the local partner behaves like an industrial firm or like a rent collector with a good lawyer. A country that will not allow foreign equity into a refinery will not have a refinery. A country that allows it without asking the four questions will have a warehouse.

And we should be honest about scale, because the temptation with a good example is to inflate it. A plant of this size does not solve youth unemployment in a country of tens of millions. It employs hundreds, not hundreds of thousands. Its value is that it is a template, and a proven one: clay plus heat plus standards equals a locally made input that used to arrive by ship. There are other lines waiting for the same treatment. Fertilisers. Packaging. Pharmaceuticals. Food processing. Why, for instance, is cocoa, which we grow better than anyone, still leaving this country mostly as beans and arriving back on our shelves as chocolate made by somebody else, when the grinding, the butter, the powder and the brand are all steps that can be held here? The policy question is whether we will build ten more of these or spend a decade admiring this one.

Torgome deserves its own paragraph, and this is where I will be accused of ingratitude. Clay is dug out of the ground. There will be a pit, there will be dust, there will be water to manage, and there will be families whose land and patience are being used. The community at Torgome should be given the same scrutiny and the same protections we rightly demand for Atewa. If we demand water, restoration and consent from a foreign miner in the Eastern Region, we must demand them from our own clay in the Volta Region, and we must not go quiet because the plant is local, the cement is green and the story is good. Consistency is the only thing that makes an environmental argument impossible to dismiss. A campaigner who applies his standards selectively is a lobbyist.

So what would a serious government do with this example, beyond cutting a ribbon? It would measure the right thing. Not the foreign direct investment announced, which is a press release, but the value retained, which is an accounting fact: how much of every dollar of output stays in this country as wages, taxes, local procurement and reinvested profit. It would publish that figure for every major project, beside the ribbon photograph, and let the comparison embarrass whoever deserves it. It would build the standards that force substitutes to compete rather than merely appear. It would attach a skills covenant to every industrial licence, so that a plant which does not train a successor crew does not get a renewal. And it would send its industrial policy people to Tema to ask how long it took, what obstructed it, and what would have to be true for ten more like it.

The young of Europe are in the streets because the future they were promised has not arrived and they can see the arithmetic. Our young have been quieter, but quiet is not contentment, and the continent currently on fire should be read as a warning rather than a spectacle. The answer to that warning is not a speech about youth empowerment. It is a factory that turns something we have into something we sell, paying wages that can be taxed and skills that can be handed on.

One plant in Tema has begun to do that. The question is whether it remains an exhibit or becomes a policy.

Now. Not tomorrow. Yooooooooooo. A word to the wise...