A deliberate plan to partner the private sector to revive struggling and abandoned factories will breathe new life into the country’s recovery from the current economic crisis, an Economics Lecturer at the University of Ghana, Dr. Nkechi S. Owoo, has advocated.
Domestic manufacturers, such as Pwalugu Tomato Factory, Komenda Sugar Factory, Tema Oil Refinery, Volta Aluminum Company (VALCO), Akosombo Textiles Limited, Wenchi Tomato Factory, among others, have either shut down or are struggling to stay afloat while the country spends billions importing products that can be produced by some of these firms.
However, Dr. Owoo, a Senior Lecturer at the Department of Economics, in an attempt to proffer solutions to the current economic crisis characterised by high inflation of 40.4 percent, high cost of living, rising cost of fuel, and a fast-depreciating cedi, opined that these companies, if revived and retooled, have huge a potential to help restore relative stability.
“These companies can reduce our import bills on sugar, rice and tomato, and serve as raw materials for industries,” she added.
Dr. Owoo said this during the 46th Annual General Meeting of the Ghana National Chamber of Commerce and Industry (GNCCI) in Accra, and explained that the government could partner the private sector to revamp them as part of an import substitution strategy, or under a broader plan to shift from import reliance to local manufacturing.
She spoke on the theme ‘Ghana’s Cyclical Economic Crisis: Time for Bold Policies to Address the Economic Structure’, and said reviving abandoned or struggling domestic manufacturers would offer both short and long-term gains – adding real value to the economy and boosting the recovery process.
It will also help strengthen the domestic currency which has lost over 50 percent of its value against the United States dollar this year by reducing imports, as well as create quality jobs for young Ghanaian men and women, she said.
While government has constantly blamed the COVID-19 pandemic and Russia-Ukraine fight for the current economic situation, Dr. Owoo – just like many economists and business associations like the GNCCI – hold the view that the import reliant structure of the economy makes it very susceptible to external shocks.
For the President of the GNCCI, Clement Osei-Amoako, government should encourage multi-nationals to keep a certain percentage of their earnings with local banks.
This measure, if properly implemented, would shore up the country’s foreign currency reserve and further strengthen the domestic currency, he noted.
“It is high time, as a country, we lived within our means. The acceptance of a fiscal deficit in the nation’s finances is unacceptable, and has been the reason for the government competing with the private sector for capital with a high-interest rate,” he said.
Mr. Osei-Amoako further lamented that high-interest rate remains a major obstacle to the growth of private sector, hence, it should be tackled with all seriousness.
