Komenda Sugar factory has vindicated Rev. Otabil and I

When the idea of reviving the Komenda Sugar factory was floated around with the accompanying business plan, IMANI Ghana wrote a position paper critiquing it, besides cataloguing the reasons for the unviability of the project.

It was a very technical paper, and I am quite sure many never understood it. On the other hand, I will not give the government the benefit of the doubt, because they have the expertise to peruse every niggling detail with the utmost comprehension. It came as no surprise to me when the usual suspects condemned them from the roof tops. I think some even labelled them as unpatriotic just for stating the obvious.

Well, the government experts thought otherwise and went ahead with the project without incorporating some of the salient points raised by IMANI, which could have strengthened the position of the factory.

It was commissioned roughly about three weeks ago amid pomp and fanfare. There is even about four minutes YouTube video clip captioned ‘miracle at Komenda’. Barely two days after the commissioning of the factory, the story broke that it was being shut down for maintenance.

The shock was prodigious to most Ghanaians. However, there has been counter claims about the validity of the that information. Be that as it may, all is not well with the miracle Komenda Sugar factory, and I hate to say I told you so. All the issues that were raised by IMANI Ghana for which they were castigated have been proven right.

The government has no business in building factories like I emphatically stated in my four-part series in support of the tempest wrought by Rev Mensa Otabil a couple of months back when he famously declared that the government has no business in schools and hospitals.

When Pastor Otabil said that government should leave the people of Ghana to manage the economy, he took a lot of flak for it. And I had my fair share when I had the incredible temerity to come to his defence. Komenda sugar factory did not even let the rooster crow before exposing the absolute unmitigated incompetence of the Mahama led NDC government.

The pervasiveness of government involvement in schools, for example, is beyond complete. As such, not many people are able to contemplate the alternative, which can improve the standards of education in the country, as we look on with impotent rage while standards plummet inexorably.

Adam Smith argued distinctly, without any equivocations, in his voluminous Wealth of Nations that ‘In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.’

The production of sugar has been completely mechanised from the field to the warehouse of the wholesaler. For example, in the UK, sugar is produced cheaply from beet sugar, which is heavily mechanised. The efficiency of the production methods makes their operation more profitable, because their by-products even bring them a lot of income that is able lower how much they can sell their sugar on the world market.

So you ask yourself the question why should we produce sugar at high cost when we can buy cheaper from the UK or Brazil. Besides, the same land can be used to produce worthwhile cash crop like rubber, cocoa, coffee and even cereal like maize which is very expensive in the country. These cash crops, our best bet, can be exported to finance the import of cheap sugar from China or India.

Nobody should get me wrong; we can produce sugar in the country, but not with the current expensive labour intensive methods. And the only way to promote and sustain Komenda sugar is to impose punitive taxes on imported sugar. And by doing so you punish the poor, because with their meagre income they have to maximise every cedi. The obvious unpalatable result will be smoothing the way for Ghanaians into criminality.

They will avoid the payment of those penal taxes, and I need not state that less money will come to the government though the sugar will still find its way into the country through smuggling to undersell Komenda. The obvious denouement is the factory turning into another white elephant.

The people of Komenda did not need this inevitable white elephant. What they needed from President Mahama is to work assiduously to control inflation that is destroying the economy to allow enterprising Ghanaians to plan ahead.

For example, the people of Komenda are fishermen, and their main capital investment is the outboard motor. When the NDC came to power the most popular Yamaha brand was sold for GHc 2,900. Now, it sells between GHc 11,500 – 12,000. So, most of these fishermen cannot afford this indispensable tool in their fishing business.

This is what is creating the unemployment in a fishing community like Komenda. When genuine economists (not those lunatic political economists) write about the government creating conducive environment it means reducing inflation, removal of unnecessary red tapes and repressive taxes etc. which destroys businesses.

If President Mahama and his battalion of incompetent ministers really meant business, they could have incorporated the suggestion and criticism of IMANI, and ensure that all the ground work that will make this factory operate successfully was in place.

But the success of the project is of no interest to them, but winning the 2016 election. Instead of them to tackle the stifling inflation that is destroying jobs and the lives of ordinary Ghanaians, they come up with this illusion of creating 7,000 jobs that only exist in the crumps they leave at the table after they have finished feeding from the national kitty.

Writer's email: baidoo_philip@yahoo.co.uk