1 District, 1 Factory: An appraisal of a rosy promise

GIHOC Factory The government has assured that the project will seat in June/ July

Sun, 21 May 2017 Source: Jean-Philip Lawson

No sooner had I thought of making an informed contribution to it than I got drawn intimately to the pages of the book and its insights.

In the lead up to the 2016 general elections, the campaign took an interesting twist with the coming of the promise of ‘ones’. As interesting as they were, one of the 'ones' stood out. And about that, your guess is as good as mine. That is what will be discussed in this treatise.

His Excellency, Nana Akufo-Addo and the New Patriotic Party (NPP) have been touted by many analysts and observers to have won the political game by putting more 'juicy' offers on the table of the electorates as against their competitors. The notion is quite true, although it cannot stand as the lone reason for their victory.

The 'one-district, one-factory' is a welcome idea; as it stands to help mitigate many of the economic challenges we have, particularly in transforming the Ghanaian economy into more of an industrial one than one of subsistence. An industrialization policy to this nation is nothing new. The best reference to it in Ghana was in the Nkrumah-led era. His government's industrialization policy was ambitious and was undertaken to a very great extent. But what happened? It was not sustainable.

That is what should be the focus of any well-meaning Ghanaian, especially the policymakers and the implementers of this promising move—its sustainability.

About sustainability, I will talk of it using insightful knowledge I had from reading a recent, but rich and detailed economic research work, 'Why Nations Fail'. The book was published in 2012 and was worked on by Daron Acemoglu and James A. Robinson. Its central theme is in identifying the economic differences among nations, how they occurred and what can be done to 'bridge the gap'.

As they argued that economic prosperity or challenges were not caused by ignorance as some economists or scholars would, using ‘The Ignorance Hypothesis’ they made the following comments.

Allow me introduce it as it forms a core part of what this article is about:

"On the face of it, the sustained economic decline that soon set in in Ghana after independence from Britain was caused by ignorance. The British economist Tony Killick, then working as an adviser for the government of Kwame Nkrumah, recorded many of the problems in great detail. Nkrumah’s policies focused on developing state industry, which turned out to be very inefficient.

Killick recalled: The footwear factory … that would have linked the meat factory in the North through transportation of the hides to the South (for a distance of over 500 miles) to a tannery (now abandoned); the leather was to have been backhauled to the footwear factory in Kumasi, in the center of the country and about 200 miles north of the tannery. Since the major footwear market is in the Accra metropolitan area, the shoes would then have to be transported an additional 200 miles back to the South.

Killick somewhat understatedly remarks that this was an enterprise “whose viability was undermined by poor siting.”

The footwear factory was one of many such projects, joined by the mango canning plant situated in a part of Ghana which did not grow {mangoes} and whose output was to be more than the entire world demand for the product.

This endless stream of economically irrational developments was not caused by the fact that Nkrumah or his advisers were badly informed or ignorant of the right economic policies.

They had people like Killick and had even been advised by Nobel laureate Sir Arthur Lewis, who knew the policies were not good. What drove the form the economic policies took was the fact that Nkrumah needed to use them to buy political support..."

So you see, the success of this may not necessarily lie in siting industries in every district, neither is it in providing them with resources. Its success will lie in the proper establishment and maintenance of these industries; siting them close to the source of the raw materials and ensuring there are ready markets and easy access routes to facilitate exchange and transportation, respectively. And this, without preference to political pressures that will arise.

At the moment, ‘One district, One factory’ remains an important promise rather than a fully-fledged policy. It is yet to be fully adopted as a line of policy for the government. The preliminary steps have been taken, as the budget for the year captured it, signifying that it is a priority of the government.

What well-meaning Ghanaians expect is that these industries will serve as the catalyst to the economic growth that they so much desire. However, history reminds us that our noble objectives may hit hard against the rocks depending on how we will set out to achieve them.

‘One district, one factory’ should not be done for any selfish political reason(s), it should not be left in the hands of the unskilled; neither should it serve the interests of only a few. At the end if it all, Ghana should be mentioned of as a country that succeeded.

Thanks for reading. Share your thoughts and share.

Columnist: Jean-Philip Lawson