Ghana’s drive towards export-led economy

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COVID 19 has rammed home some fundamental truths on the social and economic issues that Ghana and Africa must address to resuscitate the local and continental economies.

In his last address to Parliament Finance Minister, Mr. Ken Ofori Atta indicated that Ghana’s economy might shrink by some GH¢9.5 billion, with the dire consequences for livelihoods.

President Nana Addo Dankwa Akufo-Addo has stated several times that the Coronavirus pandemic has presented numerous opportunities that can be nurtured to build a stronger, self-reliant and resilient economy. According to him, the pandemic was a wakeup call for economies to push for self-reliance, as the pandemic had created dysfunction across the world and exposed the weakness of the global supply chain.

“The COVID pandemic has demonstrated that when you are over-reliant on global supply chains you will be exposed in situations like COVID 19. We have to do things for ourselves “, he recently told a group of young entrepreneurs at a Presidential Pitch programme, a government initiative to develop young entrepreneurs.

This far, the response of the Government of Ghana to the COVID 19 pandemic has been widely hailed worldwide. In his latest address to the nation on policy measures to deal with the effects of COVID 19, President Akufo-Addo outlined five key objectives around which to bring the economy on track. One of the policy measures bothers on how to stimulate the expansion of our domestic capability and deepen our self-reliance.

“I am of the firm belief that this pandemic presents us with a unique opportunity to lay the foundations towards the ‘Ghana Beyond Aid’ agenda”, says President Akufo Addo. Other national personalities like Pastor Mensah Otabil have been emphatic that COVID 19 and its effects presents the biggest opportunity for Africa to claim its rightful place in global economic development.

Trade and tourism

It has also been recognized that an increase in trade is the surest way to boost Ghana’s economic recovery, in as much as trade can deepen regional integration.

This will translate to a rapid increase in the exchange of agricultural, industrial, financial, scientific, and technological products to enhance Ghana and Africa’s economic fortunes. Only intra-African trade can create prosperity and provide opportunities for employment for African youth.

The economic integration of Africa will lay a strong foundation for an ‘Africa Beyond Aid’. The speedy recovery of Ghana and Africa from economic downturn will largely depend on local consumption patterns driven by prudent  policy directions. Achieving this will require citizens to realign their taste to conform to local products and services. We must begin to appreciate what we produce, rather than continually patronizing foreign goods. As stated earlier, patronising local goods and services will revitalize our industries and make them competitive locally and globally

. One sector that Ghana has been overlooked is the potential of tourism to generate revenue and create jobs. Since tourism was one sector that was hardest hit by COVID 19, the government should channel more resources to revitalize the industry in the short to medium term. The “Beyond the Year of Return” initiative should be given priority in the post COVID recovery plans.

Export initiatives

The Ghana Standards Authority (GSA) and the Food and Drugs Authority (FDA) are currently leading the manufacturing and industrialization drive. Both state institutions have gained international recognition for ensuring compliance with international standards and quality of goods in and out of Ghana. The partnership between the GSA and FDA has created the enabling environment for local industries to boost production of services peculiar to COVID 19 response. Prior to COVID 19, Ghana had only eight hand sanitizer brands, but currently there are a thousand brands. According to Professor Alex Duodo, the CEO of GSA, Ghana currently exports hand sanitizers and fabric-made face masks to neighboring countries.

Besides, the pharmaceutical industry is one area Ghana can build the post COVID recover around. Even before COVID 19, Ghana was reported to have a competitive advantage in pharmaceutical products, with ECOWAS being the major market.  Thus, COVID 19 has only become the building blocks to a robust pharma industry. Prof Duodo disclosed in an interview on Oman FM that five new local pharmaceutical companies are being developed to augment the capacity  for export. Under the scheme, local companies would be given licenses to manufacture foreign drugs, using the same standardized formula of the parent company.

Manufacturing

Discussions on the roadmap for economic recovery have centered on financing and boosting manufacturing, agricultural and IT infrastructure.  Government’s efforts this far have been geared towards growing stronger in  manufacturing iron rods and electrical cables for export. This is a sector that has the capacity to grow and become a major exchange earner for Ghana. There are indications that the cement sector could become the backbone of industrialization. Currently there are more than six cement manufacturing companies in Ghana, that produce enough for the local market and reducing import of cement.

Surrounded mostly by landlocked countries, Ghana can become the hub of manufacturing, through vehicle assembling for local use and export, providing highly paid jobs to our skilled labour.   The response by Toyota, VW, Nissan, Renault, Hyundai and Sino car brands to assembly cars and trucks in Ghana is strategic to the ‘Ghana Beyond Aid” development paradigm. Production of vehicles in Ghana is not new. In the 1960s the Auto Parts Assembling plant in Ghana produced Nissan buses for local use. Neoplan and Marcopolo buses were similarly assembled locally. In fact, two brands of cars-Adom and Boafo were designed and produced in Ghana. These initiatives reduced Ghana’s import expenditure. One wonders why a country that had so much industrial and manufacturing potential after independence slumped to a poor country and struggling country.

The recent shutdown of  Neoplan  Ghana plant in Ghana, due to financial difficulties is a replay of  how our industries sank in the 60s. It is unfortunate that Neoplan Bus shutdown at the time the Automotive Development Plan was being rolled out. The government should consider refunding Neoplan Ghana as part of its automotive development plan and vehicle manufacturing drive

Nonetheless, it is refreshing that VW, Toyota, Nissan, Renault and Hyundai have started to assemble cars in Ghana. A few weeks ago, VW released the first batch of Tiguan cars assembled in Ghana, which have since sold out.   On overage, West Africa imports 450,000 cars annually, totaling $1.7 billion. If Ghana positions itself to supply 100,000 cars to the ECOWAS market, that would boost exports and reduce out import expenditure. As the host of AfCFTA, Ghana must take advantage through industrialization. It therefore battles me that a former President, John Dramani Mahama, who is seeking reelection could describe the VW brands produced in Ghana as substandard and would rather push for Ghana’s dependence on secondhand cars.  While, we cannot stop the importation of secondhand cars, it is prudent for the country to pursue an industrialization policy as indicated in the current’s government’s Automotive Development Plan. No country, repeat, no country can aspire to become a developed country without boosting manufacturing and industrialization. We need to take a cue from South Korea and China. A few years back, these Asian countries were apar with Ghana on all development indicators. But through carefully crafted development visions and committed implementation, they have outstripped Ghana to the point of becoming key donors and lenders. Regarding manufacturing and industrialisation, the options offered by opposition are not only backward, they lack a definite vision of what Ghana should look like in future.

AfCFTA

As stated above, the COVID 19 pandemic has heightened the timeliness and importance of  the Africa Continental Free Trade Area (AfCFTA). Despite the impact of COVID-19 on African economies, AfCFTA Secretary-General Wamkele Mene said an opportunity exists to establish robust supply and value chains for Africa; as well as diversify the continent’s productive capacity, particularly from the overreliance on the export of primary commodities.

According to the Secretary-General of AfCFTA,  Africa continues to be trapped in a colonial economic model, which makes a pressing case for Africa to aggressively implement the AfCFTA, as a key tool for effecting a fundamental structural transformation of Africa’s economy. AfCFTA will promote intra- Africa trade and provide a huge opportunity to exploit the abundant wealth and resources for our collective benefit. “We have to take action now to dismantle this colonial economic model”, Mene stressed. With AfCFTA commencing in January 2021 Africa is now the world’s largest free trade area, covering a market of 1.2 billion people, and a combined GDP of $3 trillion.

He added that Africa must respond to the multilateral trading system by consolidating and advancing “our continental market integration objectives, through the AfCFTA. “AfCFTA signals that Africa is open for business and mutually beneficial investment, thereby creating decent jobs and improving livelihoods,” Mr. Mene added.

In my view, the post-COVID 19 restoration requires all of us to renew our minds, and be more patriotic, loyal and responsible.  We need to strip our minds of that sense of entitlement without any recourse to responsibility. Every Ghanaian has a crucial role to play in making Ghana better for all, not the privileged view. State institutions must rise to the occasion, and support the industrialization drive as GSA and FDA are currently demonstrating.  As President Akufo Addo recently stated, “we are not just fighting a pandemic, we are building a country.”

(***The writer is a Development and Communications Management Specialist, and a Social Justice Advocate.  All views expressed in this article are my personal views and do not represent those of any organization(s). (Email: [email protected]. Mobile: 0202642504/0243327586

 

 

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