Why NPP’s One-District-One-Factory will fail miserably

Nanaaddo Factory President Akufo-Addo

Thu, 13 Jul 2017 Source: Yusef Gariba

When I first heard Akufo-Addo proclaim his flagship policy of one district, one factory during the campaign trail for the 2016 elections, I became dumbfounded for a while as I struggled to wonder why a center-right political party will bother to institute a program that only the far left does.

I began to conceive maybe the proclamation is part of the regular political gymnastics that we have seen of recent times in Ghana just to woo voters. I gave Akuffo Addo the benefit of the doubt so this thinking remained in my mind and never told others what i thought of the policy.

I also began to conceive that it would take only a stark raven mind to object to a government policy of this like, no matter the kind of political or ideological disparity between a person and the ruling party instituting it.

Following this, I became keenly interested in the policy because I could strike on the periphery, a lot of similarities with Nkrumah’s sterling Seven Year Development Plan which was designed to transform Ghana into a modern industrialized African country – something Ghana, 51 years after 24th February 1966, can only dream of.

It was not until Akufo-Addo dropped a bombshell on his interview with Akwasi Sarpong of BBC, stating categorically that he would be pushing the one district one factory to the private sector because himself and his party do not believe in government enterprises – as they ridiculously put it, ‘government has no business doing business’. This was when I started to have strong reservations about the whole policy – all along; I had been thinking that government was going to be the principal investor in the implementation of the policy.

Whence, I conducted a deep analysis of the policy. My analysis was tantamount to opening a Pandora’s Box. The consequences of instituting such a policy the Akufo-Addo way would be too much of a burden for Ghana’s already crooked vertebral column to bear.

I am no economic guru but from the little I know, I came to a conclusion that one district, one factory would be a massive failure. Hold your fire, lynch me not yet. Read my reason, you may find a justification to lynch the bald septuagenarian instead.

By creating the enabling environment for the private sector to invest their capital, government is as well inviting overseas capital into our country. We cannot do this when we have not fully protected the welfare of the ordinary Ghanaian worker. Ghana’s minimum wage is GHC8.8 and this translates into less than GHC300 a month for a Ghanaian worker in the private sector.

Foreign investors will take advantage of this crack in the protection of the welfare of the Ghanaian worker to press home their selfish interests when they invest their monies in Ghana. Yes! The plan would succeed in reducing unemployment by virtue of the fact that cheap labor would be in high demand to keep the factories running and a lot of desperate Ghanaian workers would be very glad to fill the vacancies – it would appear a divine intervention to them because they have been searching for jobs for decades with no hope of securing any.

But what everyone else is not talking about is that, the twin brother of unemployment underemployment, which is more cantankerous, would become the automatic heir to the throne of the former, if the policy should be implemented the private sector way.

All this comes off the backdrop of Ghana being the country with the highest cost of living in Africa. It only becomes a matter of time before frustrations and disillusionment catch up with the millions employed. This would be the outcome of such a policy because the earmarked target of this test which is to raise the standard of living of Ghanaians would be a mirage.

The primary aim of every private investor venturing into any enterprise is to accumulate profit and one of the ways to do so is to cut down on expenditure which includes decreasing the price of labour.

The prospect of Ghana’s minimum wage improving substantially with private capital investment is nether, as it was the incentive that attracted them in the first place.

Over 100 foreign investors have expressed interest in the one district one factory project. You know why? They are coming to overwork the Ghanaian, pay him peanuts and make huge profit margins, without having to face recourse to any law.

If you don’t believe me, just turn around and read the inscription on the bottom part of any i-phone you get hold of. It is written, ‘designed in California but assembled in China.’ You will agree with me assembling of a phone is more labor intensive than its design process. But because the US capitalist firm producing i-phones cannot afford to employ American labor to assemble the phones in the US, since they are bent on making profit, they shifted the whole assembling plant to china where the cost of labor is relatively low.

And now that China has also come of age, and seeking to maintain the economic upheaval it has managed to bring off, it is planning to relocate all its labor intensive industries from China to Africa where labor cost is the lowest relatively so as to continue making profit to dominate as global economic powerhouse.

Guess who are in the queue to invest in the one district, one factory policy? Chinese private firms!

But on the contrary, and more often than not, the focal point of all government enterprises is not on profit accumulations but on rendering of services.

What is wrong if government instead of private capital invest in the creation of industries in Ghana?

If it is good for private hands to make profit, why is it bad when governments do same?

Besides, what is the use of the profits accumulated by private firms, if not for the prestige that one man or a family stands to get for being among the FORBES LIST of the richest either in Ghana, Africa or the world?

You and I know very well that when governments make profits, apart from some corrupt officials embezzling some of the funds, the chunk of it goes into the provision of social services, building of infrastructure and servicing of debts which goes in the long run to benefit everyone who lives in the country.

One district one factory would not help Ghana retain cash in her economy. Profits accrued are going to be siphoned to improve alien economies to the detriment of ours.

Ghana’s one district one factory will fail because Ghana’s government has accepted and signed the Economic Partnership Agreement (EPA) with the European Union(EU). This is an agreement that has opened Ghana’s market to every product coming from the EU and in return, EU countries have also opened their markets to goods coming from Ghana.

Such a pact appears to be good and a win-win scenario for the stakeholders involved, but a critical look of the pact discloses a number of schemes plotted to continue the siphoning money from Africa or the ‘developing world’ to the ‘developed world’.

Europe as we know is a highly industrialized continent. They only export manufactured goods while many African countries of which Ghana is no exception, export only raw material, because they lack industries. This has been the type of trade relation between Africa and Europe – the result? We all know. That is how come Africa is very poor in the midst of plenty while Europe is very rich.

Now Ghana seeks to industrialize. For all intents and purposes, it’s a very good initiative but we are going about it the wrong way. How do we sustain our industrialization drive if we don’t put measures in place to check our budding industries from collapsing?

I am no historian but let me chip in a bit of history I know to buttress my point. During the industrial revolution in Europe, there was a time when European countries like France, Britain, Germany and the likes were not trading among themselves. They feared their neighbor could hijack their markets with their goods. These countries put their markets and that of their colonies out of the reach of their neighbours. The countries involved had comparably the same industrial strength and the quality of their goods, almost the same.

Now history class is over. You will bear with me that if Ghana launches its industrialization drive, it would take us some time for our finished goods to equal the standards of Europe. That being said, suppose Ghana starts to produce mobile phones and also on the Ghanaian market, we have Europeans phones which are even better than what we produce locally, which of the phones would the Ghanaian buy? Your guess is as good as mine.

For how long have we been shouting ‘buy made in Ghana goods’? How may Ghanaian businesses have since seen a boost and juxtapose it to the number of them that have collapsed.

The only time Ghanaians would buy ‘made in Ghana goods’ is when there are only ‘made in Ghana goods’ on the market. Maybe Akuffo Addo can take a cue from Muhammadu Buhari on this subject matter. In Nigeria today, one can get not less than 5 years prison sentence when accosted importing rice into the country. Is rice Indian hemp? NO! Is rice cocaine? NO! But why?

The answer is simple. The Nigerian government has resolved to establish a rice industry to wean itself of the dependency on foreign rice contributing to the recession that the country is going through right now. It has to protect the budding rice industry but it cannot do so if people are still importing American and Chinese rice into the country.

Someone must convey this message to Akufo-Addo otherwise, one district one factory would become a very big joke that not even a century could erase from the memory of people. Any mention of one district… would spark an uncontrollable ridicule on Ghana in every corner of the world.

Columnist: Yusef Gariba