Former finance minister Yaw Osafo-Maafo is advocating a development revolution that will help the country industrialize and produce jobs for its peoples.
He is also proposing that the country’s technocrats be at the forefront of the revolution in order to shape and guide the direction of the country’s development into a middle income status.
“To move the pace of development, we need to expand the frontiers of the economy through increased value addition and industrialization, without which we will find it difficult to reach our goal of middle income status. We need to add value to our agriculture produce and the country's natural resources. We cannot do this smoothly without the technocrats - trained technical skills” he said. Addressing lecturers and students of the Kwame Nkrumah University of Science and Technology, Mr. Osafo-Maafo who is also MP for Akim Oda said the challenge facing Ghana is how to effectively improve skills development and scientifically apply thought processes to economic development to propel our country on to a different growth pedestal.
The aspiring presidential candidate on the ticket of the ruling New Patriotic Party told the packed KNUST Great Hall that Ghana as a country and economy is still yet to take off 49 years after independence , but maintained that his party’s hard work over the last six years has positioned the economy for take off soon. Drawing analogies with Singapore which was transformed from a poor state into an advanced country in 30 years and Malaysia which has leaped miles and miles ahead of Ghana, the former finance minister said while the frequent interruptions by the military in the management of the economy is part of the problem, there is a lot that as a country we can do to move the economy on. He among others proposed that the country reconsiders the former coup leader Kutu Acheampong’s Investment Policy Decree which reserved some sectors of the economy for Ghanaians only.
“The spirit behind NRCD 329 is laudable and necessary to grow the economy in favour of Ghanaians. Our traders in the retail and wholesale businesses are being displaced gradually by foreigners and this must be prevented.” Flanked by former NPP General Secretary Dan Botwe, former Ghana Medical Association President Dr. Kwakye- Maafo, a number of NPP MP’s and the KNUST Vice Chancellor, Mr. Osafo- Maafo said another area that needs to be critically looked at is public finance and tax revenues.
According to him, “it is unacceptable that current tax revenues can cover between 60 to 70% of budget with donors financing the rest.”
Some recommendations by Mr. Osafo-Maafo during his presentation
We need to develop a strong ethical brand of indigenous business leaders and entrepreneurs with a high sense of nationalism who are world class beaters. Look at India (Infosys), and S.Korea (Samsung) for example. It was not until the late 19605 that Ghanaians moved into the distributive trades, and entrepreneurship. Ghanaians before then knew only of agriculture or being in public service. In all the key economies and those Newly Industrialized Countries, (NICs) the local businesses are in the majority when it comes to contributing to GDP, employment, taxes etc. There is the need to revisit the Investment Policy Decree, 1975, NRCD 329 of General Kutu Acheampong which reserved some sectors of the economy for Ghanaians only. The spirit behind NRCD 329 is laudable and necessary to grow the economy in favour of Ghanaians but the details (figures) in the old law are unrealistic in today's costing and pricing. Our traders in the retail and wholesale businesses are being displaced gradually by foreigners and this must be prevented. It is relevant to know that the Appenteng's, the Siaw's, the B. A. Mensah and the Appiah-Menka's etc. had graduated from retailers to wholesalers to become powerful industrialists of international standards. If this is the path of the development of our industrialists, then we need to protect the Ghanaian retailer and wholesaler from foreign invasion. We have to redirect such foreign investment into areas other than retailing and wholesaling where we lack the skills and the capital.
We need to create the environment for Ghanaians wherever they are, to be able to invest in economic ventures that create jobs and wealth for the country. Ghanaians do not save enough. Ghana's gross domestic savings rate is abysmally low at 12% of GDP when countries that have made it in South East Asia do between 25% and 30%. The average within ECOWAS is about 19%. The Long Term Saving Law already put in place should help improve the situation. We need strong mortgage finance providing institutions to help unlock these assets and free capital for growing businesses and provide employment. This will have to be done within the framework of overhauling of the present fragmented, undisciplined land administration and town planning scenario in which houses are built in areas without basic infrastructure. The colonialists appear to have done much better than us as can be found in most cities and towns today; the new suburbs are the places where there are no proper lay-outs, as well as the other essential infrastructure even though the most pricey real estate is in these parts. We need to reverse it. The process of facilitating land ownership and perfecting land title documentation should be made easier. In the current global dispensation you can have the best regulatory environment for investment but if you have cities with uncontrolled development and lack of efficient utility services you cannot attract enough investment. District Assemblies should collaborate with traditional authorities to develop serviced plots and land banks and allow for land to be used as equity.
Another area we need to focus on is Public Finance and tax revenues. It is unacceptable that current tax revenues can cover between 60 to 70% of budget with donors financing the rest. The NPP Government has improved this area tremendously but work still remains to be done. Only 1 million workers are in the SSNIT pension scheme out of about 10 million in the job market. If Ghana could get another 1 million people to join SSNIT, pay income tax, rent tax, capital gains tax, property tax etc. the deficit will disappear. We will then have more control over our own economic policy and direction. The introduction of the National Identification System (NIS), in conjunction with data from various sources in respect of the various professional bodies, Registrar General on companies and businesses as well as Electoral Commission on people generally can provide a basis for expanding the base of tax payers. Many Ghanaian real estate owners do not pay property tax because municipal and local authorities do not consider this area a priority area for generating revenue needed for development. We need to change this situation as a matter of urgency. Despite the fact that the best of properties are all located in Accra, in areas of Airport Residential, East Legon, Labone, Cantonments etc. we continue to use Central Government Resources to pay for garbage collection in Accra and other cities. This situation is untenable. We need to revive the fortunes of the industrial sector, particularly those areas where clearly the comparative cost advantage and competitive edge doctrine works.
We need to address in a more comprehensive way, the infrastructural development challenges. One of the reasons why Africa, except South Africa, is losing out to other countries in attracting FDIs (mining excluded), is the poor state of infrastructure in African countries. Ghana has done a lot of new roads since 1998 but significant challenges remain. Studies have shown that with increasing technical sophistication of modern day vehicles with its increased speeds, road accidents increase exponentially in single lane roads.
In order to avoid technical errors in our effort to enhance socioeconomic developments, our technocrats should have the courage to defend what is technically feasible and right.
