The honest Investment of £30 billion to the UK and its Lessons to Ghana
I have taken a decision of not allowing my self to be detracted from finishing the writing of my book titled "The Darker Side of Ghana", aimed at exploring the anomalies that make possible realities of life, virtually impossible things, in the life of the Ghanaian.
I am however making an exception, in taking advantage of the Chinese president Xi Jinping visit to the UK, in shedding some light on my case. It is a common experience in the recent times to hear of Chinese presidents, visiting other nations and investing in them. The grandeur and the hypa patronising activities host nations accord the Chinese leadership visits, even among the so called developed nation, call to question the isolated reasons most might not be associating the whole thing. The Chinese investments are entred to in the African countries, just as they are being entered into in the European countries. Everyone want someone to come and invest in their country, as such act is considered positive to the domestic economy. Presidents specifically travel to other countries with huge number of officials among their enturage, just to go and appeal to other nations for investment in their country.
I recalled when the former Chinese president visited France, Germany, Italy, Netherlands and what have you, investing huge sum on each visit. This investment is taking place in Africa just as it is being done in Europe and America. India, Russia, Brazil and even the isolated Australians, are not left behind in this Chinese investment spree. The Chinese investment at the moment, is like what the American investment use to be. It is a combination of political and economic investment. One can even say, it is just as good as having God of heaven and his angels, visiting a nation and its people. Like anything good, you have to go for it, as God may rain his bountless blessing elsewhere.
My president, H.E John Dramani Mahama take this ritual very serious and understandably so, given the desperate state of the nation. He clearly spare nothing, in the effort of visiting other nations to appeal to investors to come to invest in Ghana. There is even a sector of Ghana government Minster committed to being responsible for seeking investment and investors to Ghana. In fact, Ghana has a special office in the US, solely responsible for crying daily to the Americans to invest in Ghana. Any time my president visits the UN for a session, he ensure the mission is design to make the best out of the visitng heads of states.
My president still spare no time to run around the U.S, scouting for anyone with spare money to take them to Ghana. I brood over my president's desperation in appealing for investors to Ghana, as if someone in Ghana is assessing the president on this. I will in fact not be surprise if I learn in the future, that my president commissioned some American rough sleepers, from under the famous New York Bridge, to camouflage to Ghanaians who are desperately expected forign investors. And indeed the sight of foreign investors in Ghana, is enough to make political party foot soldiers forget their pathetic plights! It is fair on myself, to make my readers aware of the fact that the recent visit of the Chinese president to the UK did not just happen like that. No, it come with a lot of appeals by the Brits to convince the Chinese to embark on this visit. The British Queen, Prince Charles, the queen's family members, the Prime Minister, the Britsh Chancellor of the Exchequer, the Mayor of London and former prime ministers, were all actively involve in making the Chines presidents visit, a reality. In fact, the effort of the British Ambassador to China were on a daily basis to ensure the Chinese president visit came to pass. So if Ghana tried, the British experience mean they did more. But why should such advance and technologically independent country like the UK, go to all these troubles to get the Chinese to invest in the UK? What can the Chinese do for the people of the UK that the United Kingdom is incapable of doing for her self? Do you really need the British, who is key part of developing the original nuclear technology and have an enviable track record of building the facility for other nations, have the Chinese building this same thing for them? What then is exactly the secrete of this investment myth? Is it just money as most people understand it to be?
THE ECONOMIC AND POLITICAL INTEREST OF THE CHINESE £30 BILLION DEAL
Let's first look at the benefit the Chinese, are intending to make on this investment, as the givers of the money. The Chinese interest can be divided into the short and long terms, along economic and political lines. In the short term, this investment is more of a political benefit, than the economic benefit to them. The Chinese could have invested this same money into their domestic economy, as an alternative option, and make more profit. It is however important to still take into consideration the British hard currency that offers relatively good return on external investment and the British economy as one of the most secured foreign investment in the world. In the long term, the Chinese benefit shall be economics in nature. They are getting the opportunity of telling the world that their product is of international reputation, for even the Great British to trust them with such sensitive venture, like the neuclear facility. Thus, if the Chinese neuclear project is safe for the British, then it is equally safe to any nation in the world. It will be allowing the Chinese product to enjoy just the same reputation as the German, Americans or any advance nation of the world, enjoys. The Chinese are therefore telling the rest of the world indirectly that even the almighty British, need the China! On the Economic front, the Chinese are getting far less for the deal in the short term. This means, the short term return on the investment to the Chinese is far less, in favour of the British. The British stand to gain more on the economic front, which outweighs the political compromise. How then do we explain these gains and loses in line with the principles of international accounting? Is this just about the money the Chinese are pumping into the British economy or is about how the British are going to be capturing the benefits associated with the £30 investment? Money is money anywhere as long as it is capable of facilitating the basic functions of money! Imagine the £30 investment in form of a big cow, taken into a big slaughter house. Imagine Britain as the slaughter house. Imagine the people on the British Islands as so many hyenas, who are very good at hunting and waiting to engage in hunting. Bear in mind that the sole purpose of the whole exercise is about aiding in the creation and consumption of the cow meat, which depends on how each hyena contribute in facilitatoing the utilization of the meat. It will all start becoming clear to you that if the cow (£30) is to be slaughtered in China, it will be like an outside affair to the British. Slaughtering the cow within the UK means, the British fighting for a share on the British home ground. The secrete is, the cow to be eaten is a Chinese cow but the grounds on which the meat will be share, is on the British home soil. The Chinese could have chosen to utilise its cow on the Chinese land, but that is not the case anymore because of the choice made under the rule of foreign investment. Sure the Chinese will also compete for a share as well, on the British soil, but the British law prevails on their home soil. The British are fully aware of their human capabilities, which add to their advantage. So based on the international rule of of exhausting domestic options, before resorting to external ones, the major share of the impute will be by the British labour force and industries base in Britain. This rule means, everything that can be source from within the British economy have to be done internally. The supply to almost whatever is going to be needed in human and material resources, goes to British industries and people as the first option, after which the Chinese will have an option of falling on other EU sources. It is when the British and EU options have been exhausted before, the Chinese are going to be sourcing from China/Chinese. Of course, the contract will include an exclusive clause as a percentage, to go to Chinese workers/industries outside the UK but normally not more than 12% of the total sourcing. Since the British are of the capabilities of meeting up with more than 80% of the imputs domestically and are going to be paid accordingly, just less than 20% will be shared by those outside the British Island, including the Chinese themselves. The British will then be the consumers of about 80% of the benefits associated with the £30 billion Chinese investment. This even make more sense when considering that the output of the project, in term of energy, is not for export but domestic consumption. So the 80% going to the citizens as income allow them to consume an equivalent of 80% of the output in terms of energy. What is going to be left for the Chinese will be their imput as labour and manpower, on top of what the British people and their industries provided. Another thing that is added to the kitty of the British, apart from whatever anyone earn for their imput, is the tax on every earning, in addition to tax on profit. Regardless to the fact that both the British and the Chinese resources are all participating in the utilisation of the £30billion Chinese investment, every business in the UK pay tax to the state on profit, before the investors get their final share. What therefore happen is, whatever be the profit, on the £30 billion Chinese investment, about 20% of that has to stay behind as tax on the profit to the British Government, for 80% of that to go back to China/Chinese government.
So whatever is going to be reparated back to Chine on the £30 billion from Britian, is going to be less than what will permanently left behind. It will be very clear to see how foreign investment works better for the British government and her people, while the same investment work less for Ghanaians and Ghana government. Unlike the British that has got the human resources ready and able, to take over the control of over 80% of the domestic human and industrial imput of the foreign investment, the Ghanaian human resources is less able to capture enough. The fact is, we end up with less than 10%, and justifying why the Chinese have to ship in about 90% of the imput, in terms of human and non human resources as factors of production. This in turn lead to almost 90% of returns on the investment going to the imported inputs as earnings, at the expense of the domestic earners. Both the earning and even part of the capital start escaping our economy in less than a year of injection. We are incapable of capturing enough to justify why we have to get a lion share on the investment. At the end of the day, the lion share escape our economy as earnings and capital flight, making the whole purpose of the injection into the economy, defeated. Having had an idea of why our economy is not making the necessary stride in taking advantage of the available opportunities out there, we are left with the choice of re-evaluating the fate of our human resources. It is the key to turning around this gloomy fate. The slogan of "investing in people", is not good enough on its own. It is time we start looking at our culture and traditions. It is time we start looking at the fundamental challenges on liberating the Ghanaian from the constraints, that makes the potentials of an average person realisable. This is what my book, the Darker Side of Ghana seek to explore in depth. It's all about highlighting issues and matching them up with practical answers. It is, above all, about the history of Ghana that left our government with the Dual Approach of governance!!
Kofi Ali Abdul-Yekin Chairman ECRA (ECOWAS Citizens Rights Advocate)
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