In 1961, US President John F. Kennedy envisioned and declared the landing of man on the moon and safely returning him to earth by the end of the decade. On July 20, 1969, at 20:18 UTC (roughly 9 years later) the Apollo 11 became the spaceflight that safely landed the first humans on the moon at a place called the ‘Sea of Tranquility’. Americans gave the vision their best and the ‘it-cannot-be-done’ people got stunned. Today human beings have developed technology that is exploring greater depths of the universe beyond belief. It means that there is a lot we can achieve with time when we envision and diligently put ourselves to work. The only failure is when we fear and fail to persist.
During the 2016 Presidential Campaign, the President-elect Nana Addo Danquah Akufo-Addo ‘dropped’ the catch-phrase, ‘One District, One Factory’ and depending on where one stands it was received in different ways. For some pessimists it is a political gimmick, usual with vote-seeking politicians which cannot be done whilst for believers it is doable although they might not know how. I do not think politicians necessarily have to tell how a vision can be actualized. It behooves qualified experts, strategists, technocrats, managers, etc to operationalise the vision. This paper seeks to shed some lights on the way the vision can work and transform Ghana’s economy with the potential of exporting competence to other African countries towards the realization of economic freedom on the continent.
There is hardly any developed country in the world today whose national economy is not anchored on a robust local economy. Small businesses matter. They are often owned by the indigenous people employing few people (say 2-15) and working in inexpensive locations sometimes even in homes. The significant contribution this sector can make in reducing poverty, creating job and providing people with the economic enablement for a decent livelihood is downplayed in this part of the world. Our mindset is a hindrance because our orientation since independence is that on completion of say higher education it is prestigious to work in big companies and factories. So we let precious time slip through our fingers whilst lamenting that the system is hard because we are unemployed. Meanwhile there is no cedi denomination whose circulation is reserved for only those who work in ‘big’ and ‘flashy’ companies as compared to small businesses. Cedi is cedi. Period. What matters is are you working and earning enough of it?
So immediately, ‘One District, One Factory’ connotes in our minds the availability of large manufacturing buildings that produce goods and services on a large scale with machines and capable of employing hundreds and thousands of people. It is good to have large factories but are they the only means to create jobs for the many unemployed people particularly the youth in this country? No. Since independence in 1957 we have tried and keep trying the large company model for job creation and the results are not meeting our expectations. The problems of depending on large manufacturing companies for job creation include the following; Their emphasis is not on how productive people are by using local capital to generate higher income and thus increase their living standards but that wealth is created by exporting goods and services to other countries. The model ignores the fact that humans (with innovation to create wealth) are at the centre of economic development but not the quantum of wealth of a country; Goods and services that are produced in many instances are not for local consumption hence incapable of meeting local needs. The locality would have to look elsewhere for such goods and services to spend their money which consequently leaves the economy and by so doing renders the local/national economy vulnerable to external economic shocks; There is capital flight as these large companies transfer returns to their foreign owners who might not even spend their money in the local/national economy (where they did their investment) but elsewhere; The relevance and the key roles of other sectors such as education, transport, health, roads, telecommunication, security, etc are downplayed and classified as support services. But without them businesses and the local/national economy cannot strive and the quality of life cannot improve; Efforts are more on business development strategies rather than economic development strategies.
Examples abound if we do a quick scan of our political economy trajectory over the years.
Pre-Independence Period
Buying and selling was rampant particular among the coastal people. Indigenous Ghanaians were active in merchandise; dealing in goods such as guns, wax prints, alcoholic beverages, etc. which were mostly imported from Europe. They sold them to customers from the hinterlands. Indeed there were brisk business activities among the southern, the middle and the northern parts of the country. The colonial development plans and the preference of the few existing industries were focused more on the export of raw materials such as gold, cocoa, manganese, bauxite, timber, etc. There was no decisive policy of the colonial government to set up industries to boost local production. Indeed through all these times the foundation of the Ghanaian economy was barely transformed to transit its subsistence status into an industrial one. The local businessmen and women hardly experienced any capacity development or technical support let alone organizing them to assume a greater role in the productive chains. But with time the hard work of indigenous Ghanaians translated into the emergence of the educated middle class.
Post-Independence Period
So after independence the State saw the critical need to assume the commanding height in establishing the needed basic infrastructure for the industrialization of the economy. The State set up industries that did not only inadvertently compete and crowd out the private sector but stifled initiative and deprived the indigenous Ghanaian from raising capital to lead in producing goods and services that are needed to raise incomes and create wealth for the country. The State played the delicate dual roles of managing the macro economy and at the same time dominating the micro economy by making policy decisions about production, resource allocation, utility, etc. for the Ghanaian instead of facilitating the Ghanaian enterprise to stand on its feet and make its contribution. By the early 1980s the country ran into economic crises and embarked on an externally driven agenda of privatization and public sector reform. All these were contained in a bigger framework of democratization of government and redefining the relationship and the responsibilities of the state, government, the private sector and the citizens. One popular term of the 1980s is ‘it is not the business of government to do business’.
Production, consumption and innovation are drivers of change and the pivot around which wealth creation revolves. The behavior or strategies of governments in managing how wants and needs are met is critical to economic development, job creation and improved living standards. It means that Ghana must find a complimentary means to create jobs that are sufficient in the districts, tailored and to some large extend respond to local needs. And this is where the emphasis on ‘One District One Factory’ must receive our uttermost attention because of its potential to transform our economy and the livelihood of Ghanaians onto the path of prosperity and happiness. This can happen if only we mean what we say and do what we mean. The good news is that we do not have to start from the scratch; some baseline already exists that can be used to trigger the next steps.
In 2010 the first comprehensive mapping of the local/district economy of Ghana was commissioned and conducted by the Institute of Local Government Studies in which key recommendations were made towards the release of economic energies in the districts. By 2012 a national policy document was prepared but as usual with us it became strangulated for many reasons. (i) lukewarm political commitment (ii) low knowledge and skills level of people who were chosen to lead implementation (iii) changing focus of politicians and public officers (iv) frequent changes in political leadership (v) poor funding arrangements. So for 4 years definite steps to create jobs and prosperity in the localities based on pragmatic analysis, strategies, plans and activities have remained unresolved even though the number of unemployed people keep rising.
The following areas were acknowledged in the attempt to revitalize district economies: The target group which is identified to be mainly businesses that are further classified into three namely (i) business start-ups (ii) existing district-based businesses and (iii) external investors Location factors that influence the citing of business in districts with some focus on the prevailing or potential tangible and intangible factors. Synergies between established district businesses and other developmental areas such as employment promotion, community and urban development as well as wealth creation initiatives. Governance framework that puts premium on public-private-partnerships with clear and definite roles. For example the public sector (at district/regional/national level) will be responsible for administrative and regulatory functions whilst the private sector will focus on business activities in order to directly produce and market products in and (as may be necessary) beyond the local economy Process management involving stages of diagnostic and planning, implementation and monitoring and evaluation and a feed-back system for continuous renewal of the district economy.
Some key issues that emerged from a situational analysis of district economies are: Job creation initiatives in Ghana tend to be focused on export-driven companies and built on single economic sector approach rather than a multi sector approach that promotes inter-sector linkages. In many instances the initiatives are not derived from and built on the location’s competitive /comparative advantages There are some national policies that in one way or the other can enhance district job creation. These policies include Decentralization Policy Framework, The Trade Policy. Industrial Policy, Investment Policy, the Small Medium Enterprises Policy, Agriculture Policy, etc. The challenge is that many of them are centralized at the national level, ambiguous and without any clear linkages to regional and district level strategies for growth and development. The policies are sector based; they do not speak to each other and cannot be said to be geared towards a common goal that can sufficiently address the problems of joblessness and poverty in the districts. A lot of funds that could support start-up businesses and job creation is held up in public institutions including Ministries, Departments and Agencies (MDAs), Youth Employment Authority, National Board for Small Scale Industries, MASLOC, and many Projects whose officers have limited ideas about how to do business and job creation. The Projects being run by public institutions are seen in some instances to be ‘inward-looking’ sector-based interventions without any backward and forward linkages in order to derive synergy from their activities in the local economy. They are wasteful, inconsistent, and full of duplication to the detriment of the private sector which should have been given the resources for increased job creation in the districts. One of the reasons for the dominance of MDAs and other public institutions (without much pragmatic job creation results to show because their interventions are not properly informed about local economic conditions, gaps and prioritized needs) is that the interface between central government, local government, district private sector and other stakeholders is blurred. Suffice to mention that in enhancing employment in the districts it is important that the roles of the various stakeholders should be clearly defined in order to build trust, confidence and ownership. There are several institutions and organizations that are involved in some economic development efforts in the districts whose activities when well-planned, aligned and effectively coordinated can lead to the creation of many jobs. These organizations include public institutions (MDAs), Metropolitan, Municipal and District Assemblies (MMDAs), Private Sector, Non-Governmental Organisations (NGOs) /Community Based Organisations (CBOs)/ Faith-Based Organisations (FBOs), Civil Society Groups, Traditional Authorities, Training Institutions, Economic and Community Associations, Development Partners, etc. Some districts are taking very important steps such as: developing business plans and marketing strategies to attract investors, promoting inter-district collaboration to facilitate business growth, going into public-private-partnerships, setting up industrial estates and creating platforms to discuss challenges facing the private sector. What is needed is to establish sector-wide linkages and opportunities for job creation. Generally, local governments are weak in facilitating economic activities in their respective districts. They do not have the business support systems including needed competence and reliable database on district economic activities and potentials.
The assessment of investment in local economic sectors show that Capacity Building and Technical Support to businesses are the highest areas. Key economic sectors which can directly create jobs such as manufacturing, marketing, construction, transport, etc. keep receiving relatively low investment. It was discovered that among all the sectors Agriculture has a unique place as a catalyst for increased job creation. But many of the organizations in the agricultural sector face challenges including low network with selected value chains and institutions, limitations in establishing public-private sector dialogue, weak farmer based organizations, and community mobilization. Nonetheless it is likely that increased investment in agriculture can enhance institutional partnership, and the supply chain, attract value addition investment, promote export base and overall economic development and jobs in many districts.
There is a general unwillingness of people to borrow from financial institutions for business start-ups because of (a) high interest rates (b) demanding and cumbersome loan application/approval procedures and (c) unpreparedness of lending institutions to give medium to long term loans; they rather prefer short term loans which do not augur well for business start-up and retention.
From the above imperatives, it is important to ask; can there be ‘One District, One Factory? The answer is ‘Yes’, and indeed there can be more than one factory per district within the next 4 years and beyond. It means some definite steps must be taken particularly within the next one and a half years. This includes:
The rationale for the establishment of a national ‘One District, One Factory’ framework and Oversight Body is to achieve the following: Examine policies, institutional arrangements and their effect on job creation
2. Improving Good Governance
Effective implementation of ‘One District, One Factory’ requires strong leadership and governance, including political will, commitment and co-operation among all key stakeholders. It also includes sharing a common vision, ownership, meaningful stakeholder and public participation, effective coordination and integration, transparency and trust among stakeholders.
The essence is to move the districts along the trajectory of community support systems, through business development to locality development which will create multi-sector, multi-level and multi-actor synergies along the lines of opportunities in and potentials of the districts. It will involve activities in the following areas; Development of strategic and action plans targeting growth and job creation
Some of the activities will include the following; Identification, mobilisation and building of database on the informal sector and the unemployed
This will involve; Special programmes for people including the youth, women and vulnerable groups Encouraging formation and functioning of social and economic groups Promote network and linkages of social, economic and community groups and traditional authorities.
Value System
It is important that the ‘One District, One Factory’ initiative is guided by the following values; It will adopt a multi-actor, multi-level and multi-sector approach; It is private sector-driven with public institutions performing facilitating, enabling, coordinating, etc. functions; Community involvement is important with special attention to economically marginalized groups; District competitive and comparative advantages is a guide to the creation of businesses and jobs; All sectors particularly the public sector will see themselves as business entities but not just support service providers; Public sector activities will be geared towards supporting the private sector to create jobs in the districts; and Human capacity development is critical for sustaining businesses, job creation and improved livelihood.
Conclusion
Ghana has an enabling environment for rapid economic development and job creation in the districts. The existing laws and policies to a large extent facilitate business development and job creation in the districts. There are institutions whose mandates are adequate enough to promote local economic activities. Some levels of job creation and poverty reduction activities are already on-going in the districts. Finally, some resources are available which can be used to release the economic potentials of districts.
There are considerable economic possibilities that can be harnessed through partnership arrangements such that so much can be achieved within a four-year period and beyond. But for this to be realized there must be a new way of doing things whereby the public sector performs facilitation roles and is prepared to partner the private sector and other stakeholders to create jobs, lift up incomes and increase economic growth and development in the districts. It is when people work and can afford the basic things in life, earn decent livelihood and are positive about the future that they have assurance that indeed government works for them.