Business Analyst - June 7

Tuesday, June 7, 2022
Development Discourse
with Amos Safo: Charting
the path for a new economy
IN what appears to be a
rejoinder to critics who
dared him to break his
silence on the state of the
economy, Ghana’s vice
President, Dr. Mahamudu Bawumai,
on April 7, 2022, admitted the
fundamental challenges facing the
economy, partly due to the
significant global economic
slowdown. He, however, assured
Ghanaians that despite the
challenges, all is not lost.
Dr. Bawumia outlined several
measures to resuscitate the
economy, key among them being
the agenda to transform the
economy from its current old
structure since 1957 to a ‘new
economy’. According to Dr.
Bawumia, virtually every
government in Ghana’s history saw
the need to change the structure of
the economy through
diversification and by shifting from
the production of raw materials to
value addition.
The vice President points out
that changing the structure of our
economy, though, will not happen
overnight. Nonetheless, economic
transformation remains a priority
for government if Ghana is to
reduce import dependency, expand
the economy, create jobs, increase
exports, and support the value of
our currency.
The vice President did not highlight
reasons why past governments failed to
transform the structure of the economy,
but in my view the inaction can be
attributed to poor economic planning and
implementation, mostly blamed on
military interventions.
Besides, the few civilian governments
Ghana has had since 1957 have failed to
continue with the economic policies and
visions of their predecessors.
Despite the relative stability of the
Fourth Republic, the five governments that
have rotated between the New Patriotic
Party (NPP) and the National Democratic
Congress (NDC) have based the country’s
development on their party manifestoes.
The use of party manifestoes as policy
guidelines explains why Ghana does not
have a long-term economic and social
transformation vision.
So, every four or eight years when
government changes hands, Ghanaians are
compelled to live with no clearcut vision of
where the economy is heading. This raises
questions on the relevance of the National
Development Planning Commission, a
state institution charged with charting the
path for Ghana’s economy journey.
Nonetheless, Dr. Bawumia outlined the
policy guidelines under the ‘Ghana Beyond
Aid’ agenda for economic transformation.
Below is the list of interventions in the
agricultural sector:
Planting for Food and Jobs to increase
agricultural output for agro processing and
food sufficiency.
The Tono dam, and the Left and Right
banks of Kpong dam rehabilitated to
provide 13,190 hectares of additional
irrigable land for rice and vegetable
cultivation.
80 warehouses have been constructed
with a combined storage capacity of 80,000
metric tonnes to provide storage and
reduce post-harvest losses.
Reforms in the cocoa sector, including
hand pollination, has resulted in the
highest ever cocoa production (1,047,385
tonnes) during the 2020/2021 cocoa season.
Industrialisation
Dr. Bawumia said policy has made a
significant impact on the manufacturing
sector. Currently, 106 factories have been
completed and are operational, and 148
factories are under construction. This
represents the largest number of factories
established under a government
programme since independence, according
to him.
Automotive Industry
He further disclosed that under the
“the Vice President did
not highlight reasons
why past governments
failed to transform the
structure of the
economy, but in my
view the inaction can
be attributed to poor
economic planning and
implementation,
mostly blamed on
military interventions.
Besides, the few
civilian governments
Ghana has had since
1957 have failed to
continue with the
economic policies and
visions of their
predecessors.
facilitation for the
assembling of cars in
Ghana volkswagen,
Suzuki, Sino Truck,
Peugeot, Toyota and
recently Nissan, have
established assembly
plants in Ghana. KIA,
Hyundai and Renault are
also on course to start
production in Ghana this
year. In addition, Ghana’s
indigenous car
manufacturing company,
Kantanka has received
incentives to increase its
production.
Along the development
of the automotive industry
is the investment in the
integrated bauxite and
aluminum industry. Dr.
Bawumia disclosed that a
wholly-own Ghanaian
company, Rocksure
International, has started work to develop
the Nyinahin-Mpassaso hills and construct
an aluminum refinery.
Besides, government, through Exim
Bank, has committed US$60million to
support the local pharmaceutical industry,
with 75% of the approved amount already
released to various pharmaceutical
companies, according to him. In fact, the
pharmaceutical industry is one sector
Ghana potentially has the competitive
advantage in West Africa, for which
government should channel its
commitment to vitalising the sector.
As stated earlier, these interventions
may well be what Ghana needs to
resuscitate our economy; but my fear is
that once these interventions are not
within a broader national development
framework, the economy will be back to
square one if power changes hands. In fact,
the speed and ease with which new
governments dismantle ongoing projects
of their predecessors is Ghana’s biggest
economic challenge.
Knowledge economy
Countries hoping to transform to new
economies must invest in intellectual
capital. To become a key player in the new
economy, Ghana needs to develop her
intellectual capital as a strategic factor of
production. The agenda is to empower
future generations with the practical
problem-solving skills to make decisions or
take actions that are important for the
future of the country. In this regard
government’s commitment to free
secondary, TvET and STEM education is a