The state of Ghana has absolved itself from a causal role in the development process, and instead, has declared the private sector the engine of growth. For herself she has reserved the nebulous role of ‘facilitator’. It is a curious metaphor of development, repeated so often as to make us take its meaning for granted without recourse to its real implications. The role assigned to the private sector is quite self explanatory. As the ‘engine’, she is expected to provide the motive force to our development efforts. However, the state's role as facilitator is rather ambiguous. In a mechanical contraption like an automobile, for example, it is easy to conjure up a mental image of its engine. But within this metaphor, what is a facilitator? The driver? The fuel? The exhaust pipe? Or maybe the drivers ‘mate’? What exactly does a facilitator do in a vehicle?
Outside the strict confines of the metaphor, however, the role of the Ghanaian state as facilitator becomes more lucid. For fifty years, the state has been the facilitator of underdevelopment, foreign dependency and exploitation of the country. For fifty years the state has facilitated the loss of national income by supervising an economy that loses value-added income on our natural and agricultural resources to foreign countries. In short, the Ghanaian state has facilitated the repression of any indigenous industrialization. Even as I write, the state is fervently facilitating the sale of Kyebi bauxite – deposits that experts say could be exploited for 200 years – to ALCAN in order to feed the Valco plant whose products are mostly exported in ingot form to the developed world – another massive value-added loss to the country.
With such a history of facilitation, when the state religiously declares the religion of the private sector as the engine of growth, we have to stop and wonder what kind of engine that might be. Or, maybe, like Dickens said, we should never wonder. Instead, by means of mathematical precision, let us analyze the capabilities of this engine of growth in our country.
It is no secret that Ghanaian capitalism developed as the stunted outgrowth of a British colonial policy that was adamantly opposed to any manufacturing in the colony. As Walter Rodney, the late Guyanese Pan-Africanist and historian states, except when it was absolutely essential to have some manufacturing enterprises, as happened when Hitler’s hordes controlled parts of the Atlantic and cut off supplies to British troops in North Africa, not a pin was to be manufactured in the colony.
Consequently, the indigenous bourgeoisie, as we are well aware, generally grew in junior partnership, and in most cases were subservient to the interests of international capitalists. The activities of our emerging capitalists have mainly been concentrated around trade in local agricultural produce, European manufactures, and the peddling of customary land concessions for European gold producers. As to the mainstay of the economy, cocoa, it was, and still is, cultivated largely by a class of small producers most of whom exist just above subsistence levels.
Today the character of the private sector has not undergone significant institutional transformation to enable it break out of this neo-colonialist shell. Granted that the explosion of the information age, and the ingenuity of a migrant population have opened up other avenues for the expression of the private sector - and we certainly must applaud these emerging possibilities - but the fact still remains that, thanks to these same globalizing factors, the commanding heights of our private sector continue to be dominated by foreigners.
A Ghanaian economist, Dr. Nii Moi Thompson, writes that contrary to popular perception, only 45% of the Ghanaian labor force is involved in agriculture, while a significant 45% is involved in the service industry. Even though he applauds this reduction in the agricultural labor force, he cannot but lament the inherent equivocation in the figures attached to the services industry. When we count all the small retailers, small time operators, dog chain sellers, hawkers and ‘kayayes’, who comprise the bulk of this services industry, a picture emerges of a private sector largely composed of small time operators, who, like their counterparts in agriculture, operate just above subsistence levels, and who, by any definition, purvey very little motive force in the equation of development. Much like the state, the private sector in Ghana is fast becoming an agent of underdevelopment. Aided by a relentless globalization, and an ineffective agrarian system, the private sector’s current indulgence in rice and chicken imports, for example, is killing off indigenous production of these staples that feed a growing urban population.
Throughout this stunted growth of the private sector, the state has not at all been passive. In fact the state has been a principal ally of the private sector’s atrophy. In the Nkrumah era, except for a few well-connected beneficiaries of limited state largesse to the private sector, the state, under the religion of a socialism that was all too dependent on foreign capital for its sustenance, effectively constrained the indigenous bourgeoisie to its colonial cocoon. Today, Malaysians are brought in to build public housing. Danish and Malaysians run our telecom systems. Chinese build our stadiums and national arts centers. Japanese and Germans build our roads. Americans and Canadians mine our gold. Half the developed world help build our schools and latrines. In turn, we import their rice, chicken, ‘oburoni waawu’ and clinker. Yet somehow we find the time to plead the sophistry of the private sector as the engine of growth.
Revisiting our metaphor again then, it seems all we have in our vehicle of growth is a faulty engine and an undefined ‘facilitator’ both pulled by foreign-owned tow-trucks, all to the advantage and profit of the foreign tow-truck owners. In fifty years, the witless Ghanaian state and its hapless private sector have succeeded in taking us right back to where we started in 1957. It is no surprise that the World Bank recently reported that Ghana’s current per capita income is about the same as it was at independence? Meanwhile sound engines and dynamic drivers in Malaysia, South Korea and Singapore, which had about the same per capita income as Ghana in 1957, have ably driven their vehicles of growth and development to heights so lofty that we can only sigh nostalgically about how we all started on the same line.
If we are to reconstruct our metaphor of growth into a functioning reality, then best practices must inform and alter this symbolism. The state in Ghana must become the very engine of growth and development, the private sector its driver, and indigenous capital augmented by foreign capital, the fuel upon which the vehicle runs. In this vehicle, facilitators, like the ‘tro-tro’ driver’s mate must take a back seat. With a dynamic engine and adequate fuel, the private sector, as drivers, are only limited – or shall I say unlimited – by the genius of their entrepreneurship.
No doubt the apostles and ideologues of neo-liberalism will label, as heresy, the role I assign above to the state as the engine of growth. They will point to the Soviet Union and other erstwhile communist countries to bolster their belief that the state cannot successfully be the engine of growth. But such criticism only evinces a misinterpretation of the failure of communism. Not only did the state, under communism, make itself the engine of growth, she coveted and acquired the driver position as well, leaving a hapless private sector in the back seat, ‘tro-tro’ mates, much like our witless state.
Only the most hardened among these ideologues would deny the state’s causal role in the industrialization and modernization of late-comer industrialized countries starting with Germany, then Japan and later South Korea, Singapore and Malaysia. The Ministry of International Trade and Industrialization (MITI) in Japan, its counterpart in South Korea, and the governments of Singapore and Malaysia were veritable engineers of their countries’ development. In contemporary times, the rise of China and the rapid development of her industry is a testament to the collusion of sound engine and skilled driver, of state and private sector involvement. But even in the development of laissez faire capitalism in the old western democracies from the industrial revolution until now, our stalwart apostles cannot deny the important role of the state in advancing the class interests of the private sector and the welfare of society as a whole.
Without adequate fuel, a vehicle with even the soundest engine, and the most skilled driver will stall along the journey. This, to put in benignantly, is the predicament of Ghana. The failure of the state to raise sufficient indigenous revenue, her dependence on foreign capital that has very little preference for our economic development, have combined to produce the triple obstacles to our development – a stalled engine, unskilled drivers and inadequate fuel.
Every Ghanaian government, since independence, has come with its own religion, those euphoric outbursts of evangelical fervor and zeal that initially bring hope to the populace only to dissipate and collapse as the vehicle runs aground due to fuel shortages. Nkrumah, as I mentioned earlier, gave us socialism – chop make I chop. Kutu gave us Operation Feed Yourself. Jerry Rawlings brought us people’s power, people’s farms and later, people’s poverty. With Mr. Kuffour, all the stars in the heavens seem rightly aligned for his much vaunted – or shall I say wishful – economic take-off. Hailing from the Busia-Danquah tradition that stresses the erection of a property owning people - that translates into a property owning class - his religion of the private sector resonates with current neo-liberalist theories and the new development paradigm of secure property relations. Already the World Bank is funding a Land Administration Program that seeks, among others, to give secure titles to land holders. With the government intent on a property owning class, they, together with the chiefs, are keen on creating land banks for the rich investor, foreign and local. We are thus confronted with a very difficult situation, a first in our history as a nation. If the so-called rich investors grab the land for their large scale ‘nucleus farms’, and our small farmers are pushed further onto even smaller plots of land, or even off the land as is happening in many mining communities, the seeds for catastrophic disintegration of Ghana would have been sewn. The purported economic take-off will fly right into the turbulent wake of the disastrous religions of yesteryear, and as the laws of fluid mechanics dictate, the vehicle will flop and crash into the abyss of civil strife.
But the current optimism of the Ghanaian movers and shakers in the private sector cannot be ignored and actually should be encouraged. In a New Year's address to the Ghana Investment Promotion Council, Mr. Ken Ofori-Atta, the Executive Chairman of Data Bank Financial Services Ltd. talks about the ‘new era …… with a deeply inculcated Audacity of Hope…….a spirit of limitlessness, a can do spirit” As a prominent example of successful private enterprise, Mr. Ofori – Atta encourages the private sector to ‘influence government policy’, to have government spend more time with the private sector instead of with donors, and cautions them not to cede the development of the nation to only politicians. In addition, he stresses the importance of the diasporian Ghanaian in the development process.
His words are bold, his optimism unparalleled, but this can-do spirit alone will not create skilled drivers of the development vehicle. It is not enough for the private sector to ‘influence policy’. There first must be a clear direction of policy. For example, the private sector must push the government into an agrarian reform that ensures customary farm holdings are consolidated into larger plots and awarded to those who actually farm the land, and not to rich investors who want to engage in large scale farming. The logic for this is pretty clear. According to a Price Waterhouse Cooper’s report, 72% of the Ghanaian population are agriculture dependent rural households and form the largest potential domestic market for output from other sectors of the economy. Since 90% of farming is on a subsistence basis and farmer incomes are generally low, it is obvious that this large population has very limited capacity as a market for goods from the private sector. An agrarian reform that will turn these subsistence farmers into commercial owner-occupiers with secure titles, backed by state assistance in inputs and credit, will institutionally transform their capacities as a market for the private sector. The infrastructural requirements alone for such a reform would present unprecedented opportunities for the qualitative transformation of our indigenous private sector and for employment generation. At the same time, these activities will generate abundant revenue for the state. This is the source of indigenous capital, of the fuel needed in the vehicle of growth.
In addition, the private sector could also come up with a plan to mine and process Ghanaian bauxite, and fully integrate the aluminum industry using Ghanaian scientists, engineers and managers. With this comparative advantage, we can become a global player in specialized aluminum products like automobile engine blocks, pistons and body plates. Only then can we stop the hemorrhaging of our aluminum resources by foreign multi-nationals. Apart from increasing our national income from the value-added component and increasing the value of Ghanaian labor, we would be creating extra government revenue, again through income taxes – more fuel for the vehicle.
These are but a few examples of initiatives that the private sector and the state can and should actively pursue in order to fulfill their respective historic roles in the development of the country. Hope and optimism that is not backed by clear concrete action at the national level reduce our best efforts to the enthusiasm of a malnourished ‘kayaye’, who believes she can, without any assistance, unload and carry away an entire 53 foot container of bulky merchandise, using only her fragile limbs.
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