Develop Programmes To Absorb External Shocks
An investment specialist, Professor Steve Godfrey, has urged Ghana to design a broad-based economic development strategy to ensure sustainable economic progress and safeguard the country from external shocks.
Prof. Godfrey, the Senior Managing Director of the Commonwealth Business Council (CBC), told the Daily Graphic that although no single country was completely immune to economic shocks, development programmes that diversified the economic basket were more likely to yield better results and ensure faster development, particularly in emerging economies such as Ghana.
The senior CBC managing director who was in the country to jointly launch the Africa Investment Forum (AIF) with the Ghana Investment Promotion Centre (GIPC) on Tuesday, told the paper on the sidelines of the programme that the country should look at areas where it had comparative advantage, to drive a development transformation in the entire economy.
'So we can use larger and stronger institutions and areas in the economy such as the emerging oil and gas, services and mining to develop the other sectors as well as the rural economy. The more diversified the economy, the more robust it will be to shocks', Prof. Godfrey stated.
The AIF, which has been previously held either in South Africa or Nigeria, will be held in Ghana for the first time from February 8-10 at the request of the President, Professor John Evans Atta Mills.
He proposed to the CBC to host the forum because South Africa has been busy organising the biggest world football fiesta, the FIFA World Cup 2010.
Although his advice is not particularly new, managers of the economy have over the years not mustered the courage to implement such an ambitious, golden economic model.
Countries such as South Africa capitalised on mining to launch an industrial revolution and diversified the economy; Trinidad and Tobago also used its oil find to develop the gas and petrochecmical industry, which it further leveraged to educate its manpower, develop other sectors of the economy and now has the reputation as the preferred destination for service delivery in oil and gas.
Prof. Godfrey said domestic ownership of the economic transformation was key in the development process, particularly in emerging economies, adding that it required partnerships between local and foreign investors.
He said Ghana could, therefore, attract the larger multinationals and design partnerships systems for local participation where clear guidelines, objectives and targets would be set for such larger institutions so that the benefits could not only trickle to the local economy but spread to the rural areas as well.
For example, breweries and large beverage manufacturers operating in the country may want to source their raw materials locally but the rural folks who could produce to meet the demand may not have the requisite infrastructure for the supply.
It, therefore, behoves the government to provide the proper infrastructure and foster the right private-public partnerships with the different players such as the financial institutions and marketing companies to provide the needed infrastructure such as storage facilities to enable the rural folks to overcome constraints related to supplies.
'So such partnerships should be developed and the large companies should be used properly to drive long-term development', Prof. Godfrey stated.
His views corroborated what the outgoing President of the Association of Ghana Industries (AGI) had been touting for ages, calling for legislation to enable large foreign companies to list on the Ghana Stock Exchange at some point.
That, Mr Oteng-Gyasi believes, will offer Ghanaians the opportunity of owning part of such companies and also reduce the strain they exert on the foreign exchange in the economy by the desire to repatriate all their profits.
Speaking at a breakfast meeting to launch the forum in Accra last Monday, the Chief Executive Officer of the GIPC, Mr George Aboagye, said the AIF follows similar CBC investment fora which had brought many investment opportunities to the host Commonwealth countries.
Generally, the forum seeks to mobilise investment for Africa, promote and facilitate trade growth, strengthen corporate governance and harness technology for development.
'We at the GIPC believe that in collaborating with the CBC to organise the event in Ghana, the country stands to gain in many ways. The event will help connect business with partners in the country and the entire Commonwealth', Mr Aboagye stated.
To maximise Ghana's gains from the forum, the GIPC is liaising with business associations in the country to give them exposure at the forum.
The centre is also touring some parts of the country to identify and invite viable and marketable business projects from Ghanaian entrepreneurs.