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25.04.2006 Business & Finance

Ghana is not yet attractive to business

By Public Agenda
Ghana is not yet attractive to business

Dr. Ishmael Yamson said, “Ghana is not attractive to businesses.”

This is because, as he argues, though “Ghana is attractive at the macro level,” with falling inflation and interest rates, and a stable exchange rate, “the economy is not competitive at the micro-level. And not until the microenvironment is competitive, the investors will not come.”

Even at the macro level, Dr. Yamson thinks there are still lingering constraints to businesses. He points at real interest rate, and says, “It is still very, very high.”

Dr. Yamson was addressing a gathering of students, entrepreneurs and would-be entrepreneurs at the Great Hall of the University of Ghana in Accra.

The occasion was this year's Development Dialogue forum, organized by the World Bank and supported by Joy FM, Radio Universe and a host of other sponsors. It had the theme: The Youth and Job Creation in Ghana. In attendance were the Minister for Education, and Sports, Osafo-Maafo, the Minister for Manpower, Youth and Employment, Kofi Adda, among civil society groups and private sector practitioners.

Dr. Yamson said: “In a country where one has to dial the telephone line not less than 10 times before one can make a call and where if one were to travel from Accra to Kumasi, one has to stop at several police and customs barriers before reaching one's destination, we cannot say we are attractive.”

His comments received a rousing applaud from the audience who thought he was bold with the facts.

Especially so, as they came from no other person than the Chairman of the Council of the University of Ghana and one who advises the president as a member of the Ghana Investor Advisory Council (GIAC).

“We have to be competitive at the micro level in order to be competitive at the global level and until this happens, we can as well forget about the talk of exporting this and exporting that,” he advises.

But Dr. Yamson's comments on the economy came in sharp contrast to those by Databank's Ken Ofori Atta and Bobby Godsell of Anglogold Ashanti.

The two had at various forums, declared Ghana as one of the best places to do business, just as government functionaries would want everyone to believe. It was however not only micro level competitiveness that concerned Dr. Yamson.

He also wanted a chain of efficiencies right from the macro economy to micro and to enterprise level. He thinks existing Ghanaian enterprises are not competitive. That technology at the enterprise level is outmoded and wages, rather than being remunerative, are premiums.

Dr. Yamson also thinks government is wrong on its rhetoric of 'government has no business in doing business,' reechoing what the Trades Union Congress (TUC) said when it reviewed the 2006 Budget Statement.

“Yes, nobody expects government to be managing every business, but the state has to provide jobs for the youth. I think it is strategically important that government leads in areas where the private sector is weak.”

He asked, “If 'government has no business in doing business', what business has it got selling petrol?” perhaps pointing out the contradictions in what government believes is its mandate.

It is however not only Dr. Yamson who thinks Ghana is not yet attractive and thus not yet in the golden era of business.

The Association of Ghana Industries (AGI) has passed a similar verdict on the Ghanaian economy. In its contribution to the 2006 budget, the AGI asked government to resolve the bureaucratic procedures investors go through in order to have their businesses registered, so as to make Ghana attractive. It also asked government to deal with public sector corruption, and the cost of business registration and many other constraints.

Commenting on the country's human resource quality, Dr. Yamson said there are many Ghanaians with skills, which must be tapped for our development. He said many of the things we import could actually be manufactured locally and wondered “why Ghanaian industries continue to import most of their items from the outside world when indeed these could be obtained here.”

He however tasked the country's training institutions to link their human resource training to the needs and demands of industry.