Business News of 2014-04-03

Framework for Ghana’s economic transformation

Ghana’s economy has achieved record-breaking growth in recent years. So why isn’t the economy transforming? The nation’s leading economists, policymakers, and business leaders gathered at the Alisa Hotel in Accra on March 31 to discuss this matter as the African Center for Economic Transformation (ACET) presented its 2014 African Transformation Report. Those in attendance included Dr. Kwesi Botchwey, Chairman of Ghana National Gas Company; Ken Ofori-Atta, CEO of Databank; Ishmael Yamson, former Chair of the Economic Advisory Council; and Nana Owusu Afari, former president of the Association of Ghana Industries. The report introduced the African Transformation Index, which ranks 21 Sub-Saharan countries on their economic transformation; Ghana came in 16th place overall, a drop of seven places since 2000, partly because the country’s exports are becoming less sophisticated: foodstuffs and gold dominate (82%) while the share of manufactured products is dropping (around 15% in 2008). In countries that successfully transformed earlier, such as Brazil, Indonesia, Malaysia, and South Korea, the opposite trend has occurred since the 1980s.
While transformation has become a buzzword recently, this report has clarified its meaning and provided a framework for measuring it to guide country strategies. According to Mr. Kwame Pianim, former Chairman of United Bank for Africa, the report can be used as a guide to help move Ghana up the rankings. “What we have here in this excellent report,” Pianim said, “is an organizing framework for economic transformation.”
The report argues that Africa’s current growth patterns are not sustainable and will not drive development or equality. Africa needs growth with DEPTH—namely Diversification, Export competitiveness, increased Productivity, and Technological innovation—all leading to Human wellbeing. Only then will Ghana, and the entire continent, truly transform. Regarding foreign direct investment (FDI), for instance, the report looks beyond the headline numbers to investigate how much is going to manufacturing and reveals that Ghana has 4 manufacturing plants financed by FDI, compared with Kenya’s 11 and South Africa’s 61.
A persistent theme during the discussions was the need for a consistent national vision that transcends party lines. Ms. Abena D. Oduro, Senior Lecturer in the Department of Economics at the University of Ghana, added, “What is missing in this country is continuity of policy. Everyone wants to come in and show they are doing something different.” During his remarks, Mr. P.V. Obeng, Chairman of the National Development Planning Commission (NDPC) supported ACET’s hopes for the Ghanaian economy. “We have become devotees of the principles of transformation,” said Obeng. “And we have to find the political system that will transform our economy.” He concluded that the NDPC should be depoliticized.
The afternoon assembly also featured presentations by Prof. Ernest Aryeetey, Vice-Chancellor of the University of Ghana, Dr. Yaw Ansu, ACET’s Chief Economist, Prof. Joe Amoako-Tuffour, Senior Adviser at ACET, and Mr. Tony Oteng-Gyasi, CEO of Tropical Cables and Conductors.
K.Y. Amoako, ACET’s president and founder, explained that ACET is a “think-and-do” tank that has supported several African governments in policy formulation as well as implementation. He ended the day with: “Transformation must be a national project. For ACET, this is just the beginning.”
The African Transformation Report can be downloaded at www.africantransformation.org.
/End About ACET The African Center for Economic Transformation (ACET) is an Accra-based economic policy institute supporting Africa’s long-term economic growth through transformation. Founded by K.Y. Amoako, former Executive Secretary of the UN’s Economic Commission for Africa, ACET’s team of roughly 30 core staff come from every sub-region of the continent, including Burkina Faso, DRC, Ghana, Kenya, Morocco, Nigeria, and Uganda. More at www.acetforafrica.org
For copies of the Ghana presentation, please e-mail Erinn Ransom-Ofori at eransom-ofori@acetforafrica.org