If Asia Can Do It, So Can We

Published 10 years ago
If Asia Can Do It, So Can We

Nana Akufo-Addo, the presidential candidate for Ghana’s main opposition New Patriotic Party (NPP), takes to the lectern in a theater packed with university students wearing the party colors of red, white and blue. Dressed in a white shirt, wearing his familiar round glasses, that accentuate his equally round face, the British-educated lawyer, turned politician, outlines his vision to transform Ghana, a nation dependent on the export of raw materials, into a thriving industrial economy.

“We have to make a deliberate, conscious effort to modernize our economy, industrialize our economy and make it a value-adding economy,” he says at the University of Ghana, in the capital, Accra.

“There are many countries in the world, [which] had similar backgrounds [to] ours that undertook this transformation, and succeeded, especially the nations of Asia—Japan, Korea, Thailand. If the Asians can do it, can we not do it here in Ghana, in Africa?”

“We are capable of doing it!” the students roar.

Ghana’s December polls are expected to be the most closely contested in West Africa, with the ruling National Democratic Congress and opposition NPP shaping their policy platforms around industrialization and social welfare. This ideal of a modern industrial African society has existed since independence, when Kwame Nkrumah, the nation’s visionary first socialist leader, followed the then popular model of import-substitution industrialization and set up a slew of state enterprises and manufacturing companies that eventually collapsed and weighed the country down with debt.

Decades later, Ghana boasts a fast growing economy that is diversifying. Close to 50% of GDP is generated by the services sector, according to Ghana Services Statistics. But despite this growth and economic shift, 60% of Ghanaians are employed in agriculture. Since 1996, manufacturing has plummeted from 26% of the economy to a mere 3% today. Ghana’s economy may be booming on paper but like many African countries, it is stuck in a pattern of exporting raw commodities and importing manufactured goods.

Socialist sentiments underscore the ruling National Democratic Congress (NDC) party’s political rhetoric, yet both major political parties view the private sector as a driving force behind economic growth. The NDC believes the state should play a stronger role in development. By contrast, the more capitalist NPP—led by President John Dramani Mahama, the former vice president who replaced the late President John Atta Mills—argues for social goods and protection against market forces.

“You must find a way of regulating the market so that it doesn’t create a class of society that loses out because everything is left to market forces,” said Mahama, in a recent interview with The Africa Report.

Both parties are committed to education and health, with free senior high school being the centerpiece of the NPP’s campaign.

From the perspective of the Ghanaian business community, the differences are subtle.

“The manifestoes are similar—they are speaking the same language with just a little color,” says Prosper Adabla, a businessman and vice president of the Ghana Chamber of Commerce.

“We have a mixture of socialism and capitalism and that is making us move well… The businessman is free, basically, to do what he wants.”

The creation of industries that process Ghana’s raw commodities, are policy platforms for both parties, with a particular emphasis on agricultural modernization. The NDC’s manifesto promises an agricultural industry strengthened by subsidies. Both parties argue that entrepreneurship is also key to economic growth and jobs.

But leaders in the business community say that while progress has been made in the way of policy, the government needs to do more to boost local business and protect it from the influx of imports from China and elsewhere.

“The government needs to do more to protect local industry through building local capacity, helping provide better access to finance and funding arrangements and improving technology,” says Seth Twum-Akwaboah, the executive director of the Association of Ghana Industries.

While positive policy developments have been made, among them the launch of an industrial policy last year, Twum-Akwaboah says that there must be more focus on implementation. Electricity offers a significant challenge for industry with erratic supplies and the recent closure of the West African Gas Pipeline, reportedly due to technical faults.

The presidential elections are expected to be close, but independent pollsters say that it is too early to determine who will claim victory in December. The NDC government will have to work hard to prove it can drive the economy forward. Ghana’s economic growth rate, which soared to great heights last year, has fallen to 7.1%, short of the projected growth rate of 9.4%, according to the Ghana Statistical Services. This along with the sharp depreciation of the Ghanaian cedi against the greenback by 17% in the first half of the year, a failed multi-billion dollar government housing project deal, and millions of Ghanaian cedis paid out in judgment debts for abrogated government contracts, pose hurdles for the NDC government.

Both parties face rising youth unemployment, poverty, underdevelopment in the northern regions, and accusations of corruption and financial mismanagement. Ghana ranked 69 out of 182 in Transparency International’s Corruption Perception Index in 2011, down seven places the previous year.

Vitus Azeem who heads the Ghana Integrity Initiative (GII), the Ghana chapter of Transparency International, says both parties have the political will to tackle government corruption.

“One of the issues is the lack of commitment of the people in power to take action against those who are alleged to be responsible for corrupt acts, especially when it involves people who are involved with and tied to the party.”

Florence Dennis, executive secretary of Ghana Anti-Corruption Coalition, of which GII is a party, echoes this sentiment, adding that while legislation is in place, allegations of corruption too often become politicized.

“For the past years our concern is that a lot of these corruption issues are politically handled and it doesn’t allow a fair sort of support from the public in terms of dealing with it.”

Ghana is among the few African countries that economists say will likely achieve the Millennium Development Goals. But the economic disparities between the arid north and tropical south pose a major challenge for Ghana, according to development economist Jeffrey Sachs. This development divide is starkly illustrated in the slums of Accra, hidden away by the city’s construction boom, where thousands of northerners flock in search of work.

In Old Fadama, Accra’s largest slum, men and women toil: dragging clumps of metal scraps and waste on rickety wooden trolleys, carrying loads on their heads, sending money back home to their families in the north, saving so they can start their own small businesses.

Inusah Sayibu, a 36-year-old tailor and father of three, has lived in Old Fadama for more than 10 years. With the small money he saved from cleaning out wood shavings from a sawmill, he gathered enough money to pay a master to train him to be a tailor. Sayibu earns ¢100 ($50) a month, well below the national average of $1,400 per annum, according to World Bank figures.

“If I could go back home, I would, but there are no companies, no jobs,” says Sayibu.

When I ask him who he will vote for, he says President Mahama and flicks his right thumb up. Mahama is from the northern region and many in Old Fadama expect that as a son of their soil, he will develop the north.

Nkrumah’s vision of a modern industrialized society has been a vision for Ghana throughout its political history, but some argue that the government ought to be more skeptical about this ideal.

“None of these two parties have questioned the idea [of] industrialization and whether it is the right form of development for an African country, particularly given the problems associated with industrialization in the advanced industrialized world now,” says Michael Whyte Kpessa from the Institute of African Studies at the University of Ghana.

“The question is, should we be industrializing now? Or should we be looking at alternative forms of development that are more sustainable, that are more germane to our particular socio-cultural circumstances.”

For the Ghana Chamber of Commerce agricultural industrialization is the way forward. “We are an agrarian economy. It is going to be difficult for us to industrialize because of the competition,” says Adabla.

Adabla adds that it will take a number of years to achieve this vision.

While Ghana may be touted as the ‘rising black star’ by some, there is still a long way to go.