Building a Domesticated Economy hinged on the private sector – Senior Minister shows the way
Building a Domesticated Economy hinged on the private sector – Senior Minister shows the way

By Clement Akoloh

The idea of moving the Ghanaian economy away from the remnants of colonial exploitations, has been on the agenda of almost all past governments in Ghana since independence. However, it is the conception of the right form and structure of the idea that has always been the problem, coupled with misguided criticisms and promises of shadow governments in their quest to wrestle power from an incumbent.

Cognizant of the structural inertia that had been set in the Ghanaian economy after 1911, the early leadership of Ghana, just like all other subsequent leaders, were determined to restructure Ghana’s economy away from a few primary commodity products towards a more value-added and diversified economy.

That is why a recent pronouncement by the Senior Minister in the Akufo-Addo/Bawumia government, Yaw Osafo Maafo, about government’s efforts to restructure the economy by growing a strong domesticated economy hinged on the ingenuity of a properly empowered indigenous private sector has been hailed by stakeholders and has also caught the attention of economic watchers, bringing into memory attempts by previous governments, yet with very little success.

Since independence, Ghana’s economy has not structurally changed as it continues to be dominated by agriculture with only some recent modest gains made by the services sector. Industry has historically underperformed. Also, export revenues are dominated by agriculture (cocoa and timber exports) with industry (mineral exports) playing second fiddles. Services are only now beginning to make a showing through tourism receipts. The economy is therefore vulnerable to external shocks and continues to be fragile, just as was the case in 1911.

However, the Senior Minister, addressing the recent Ghana Economic Forum in Accra, observed that government had decided to pursue a Domesticated Economy anchored on the exploits of the private sector and therefore directed the Civil and Public sector to gird up their loins to assist the private sector to achieve this feat.

“My idea about restructuring the economy is that both the civil and the public sector should work in the interest of the private sector for the economy to grow and become prosperous. You should tune your mind to assist the private sector to make the money. Because that is the only way we can grow our economy,” he stated.

According to him, government having charged his office with the duty of seeing to the restructuring of the economy, has decided to pursue the task based on four thematic areas agreed upon by government. Namely, Microeconomic stability and Debt sustainability; Infrastructural development with specific focus on energy; Accelerated Industrial Development, and Agricultural transformation.

Government has chosen Microeconomic stability as its number one priority and this is evidenced in the recent cuts in capital expenditure as was announced in the 2017 Mid-year review by the finance minister when the government failed to meet its revenue targets for the first half of the year under review.

It is of the view that the creation of a stable economic environment will be an enough incentive to attract the private sector to invest in the economy spur the growth that is required to generate more employment. Therefore government must make efforts to ensure a strong currency, slow inflation while stimulating high growth to point all the economic indicators in the right direction.

It also considers debt sustainability as important because, according to the Senior Minister, “government inherited a crippling debt to GDP ratio of 73.1%” which is beyond the acceptable ratio in international circles. Meanwhile Ghana no longer qualifies for debt cancelation under the HIPC framework which the Kufuor led government benefited from, since the country has now attained a middle income economic status.

Second pillar, on the scale of priority of the government is infrastructural Development with specific focus on the provision of energy. This is also understandable because power is perhaps the most critical aspect of infrastructural development. It is needless to say that a modern economy in the 21st century cannot be ran without an adequate source of power.

The Senior Minister, in reference to the impact of energy on the growth of industry, asserted that “Dumsor, perhaps was the main source of the disruption in the economy”. Therefore with the availability of natural gas deposits in abundance in the country, government will ensure that thermal provides support to hydro to produce adequate power to feed industry and other sectors of the economy for production.

The third pillar of government’s restructuring agenda is its intentions to embark on an accelerated industrial development by spreading development to the district level. This its envisages to achieve the decentralized development through the implementation of its flagship mass industrialization initiatives dubbed One District, One Factory; One village, one dam among others.

Agricultural transformation which is the fourth pillar on the agenda, is aimed at harnessing all the natural resources that the country is endowed with to ensure food sufficiency for the country and for the purposes of exports. It is the expectation of government that once the real potentials of a very well modernized agricultural framework is put in place and working, the economy will gather the right momentum to shift from the current donor dependency to an economic freedom for all Ghanaians.

These four thematic areas, according to government should be able to change the face of the economy to lay the foundation to make Ghana the center of industry in the West African sub region since there already exists a confidence in the production capacity of made in Ghana goods in the sub region.

Even though government’s Domesticated Economic Agenda is receiving some considerable amount of support, the Senior Minister’s pronouncements in other areas concerning labor and policy inconsistencies, have also ruffled a few feathers in other quarters.

A recent message delivered to captains of industry by the Senior Minister, Yaw Osafo Marfo, has sent some heads spinning about the sincerity of policy options offered and positions taken by political opponents in their diagnosis of the challenges facing the nation when they are in opposition. The concern is whether their diagnosis and recommendations are borne out of their genuine interest and expertise to help solve the challenges of the state or just a ploy to get the support of the masses to oust a government to only take power for the sake of it.

The ambitious and good intentions of the government of the Akufo-Addo/Bawumia led Administration is however contrasting with the realities of the implementation of some of the lofty ideas and promises that were made by officials of this government leading up to the 2016 elections.

Mr. Osafo Marfo has observed that government’s ambition to scale these hurdles are being hampered by low revenue mobilization, a bloated workforce, and a dearth of appropriate human resources essential to the development of the technical sectors of the economy. The criticism is that all these factors were known by the political actors before resumption of power.

“Most of those coming from our universities are not technical based, are not engineering based. Most of them are in the humanities.”

He has even hinted that government may be laying off some public sector workers because the economy can no longer support the huge wage bills of the public sector. Meanwhile, not too long ago in opposition, members of the ruling government including the President and his vice, and the Senior Minister, accused the then government of not doing right by the people by agreeing with the IMF and the World Bank to freeze public Sector Employment.

“Today, under our programme with the World Bank and IMF, the public sector is full in terms of employment. You can’t employ anybody in the public sector. The Public sector is full and indeed it is full and perhaps we may have to lay some off.”

The leadership of some labour organizations in the country have taken government on for its position on the issue of graduate unemployment and job creation in the past, which have become inconsistent with the present realities.

During his vetting in the early part of this year, the then Senior Minister Designate, Yaw Osafo-Maafo, asserted that even though the Ghanaian economy was fundamentally very strong, the management of the resources left much to be desired and according to him, “Ghana could run instead of crawling in economic development.”

The experienced politician who held Ministerial positions in different Ministerial portfolios including Finance, Education and Sports among others in the erstwhile Forman President Kufuor’s administration, observed that his team had identified several loopholes in the economy during the transition period that allowed revenues to be leaked and to be syphoned into private pockets. He assured that every effort was going to be made to block all those loopholes to maximize some revenue for the state in order to achieve all the goals set by the government.

Mr. Osafo-Maafo told the Appointment Committee of Parliament that his role as a Senior Minister is to coordinate the Economic Sectors of the Economy to help create employment for the youth in a similar role played by Hon. J H Mensah in the previous NPP administration led by Former President Kufuor.

Therefore it is not the attempt by the government to domesticate or restructure the economy that has received a public backlash which has therefore set off fierce debate from some sectors of the public, but the display of what seems to be double standards by some government officials concerning some of these issues.