WILL PREAIDENT MAHAMA’S 24H+ ECONOMY SUCCEED?
SECOND ARTICLE
CONTEXT AND INSTITUTIONAL ARRANGEMENTS
BY
HANS PETER RECKLING
(RECKLING ENTERPRISE GHANA RESEARCH)
WEBSITE: https://recklingenterprise.com
THE CONTEXT CHAPTER STARTS – AS IT ALREADY DID IN THE EXECUTIVE SUMMARY – WITH AN OVERVIEW OF THE HISTORICAL BACKGROUND (COLONIALISM) AND THE ECONOMICAL CHALLENGES GHANA IS FACING.
THE ANALYSIS OF THE ECONOMICAL CHALLENGES – EXPORTS OF MAINLY RAW PRODUCTS AND IMPORT OF PROCESSED GOODS – IS CORRECT, AS WELL AS THE ASSUMPTION THAT THIS IS MAINLY A CONTINUATION OF COLONIAL HABITS IN A NEW DRESS.
THE PROGRAMME IDENTIFIES THREE MAIN CAUSES FOR THE PROBLEMS GHANA’S ECONOMY IS FACING:
— THE LACK OF A SOUND AND INTEGRATED PRODUCTION STRUCTURE;
— DIFFICULT ACCESSIBILITY OF AFFORDABLR FINANCE; AND
— WORKFORCE SKILLS DEVELOPMENT PROGRAMMES NOT COORDINATED WITH THE NEEDS OF A MODERN, DEVELOPED ECONOMY.
THE IDENTIFICATION OF THESE PROBLEMS MIGHT BE CORRECT, AND WE WILL SEE IN SUBSEQUENT ARTICLES WHETHER THE PROGRAMME OFFERS ANY FEASIBLE SOLUTIONS TO THESE PROBLEMS.
FIRST OF ALL, THE RE-STRUCTURING OF THE GHANAIAN ECONOMY – AS IMPORTANT AS IT MAY BE – IS USELESS WITHOUT THE INTEGRATION INTO AND THE DEVELOPMENT OF THE AFRICAN ECONOMY AS A WHOLE. THE”AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) OFFERS AN EXCELLENT BASE FOE THE ECONOMICAL INTEGRATION OF THE WHOLE OF AFRICA. THEREFORE, WE MUST SEE ANY RE-STRUCTURING OF THE GHANAIAN ECONOMY IN THE CONTEXT OF PAN-AFRICANISM AND WE CAN SAY IN A DEPARTURE OF A FAMOUS DR. KWAME NKRUMAH CITATION: THE RE-STRUCTURING OF THE GHANAIAN ECONOMY IS MEANINGLESS WITHOUT RE-STRUCTURING THE AFRICAN ECONOMY. FURTHERMORE, WE MUST ADD THAT THE GHANAIAN ECONOMY IN PARTICULAR AS WELL AS THE AFRICAN ECONOMIES AS A WHOLE DON’T ONLY NEED RE-STRUCTURING, BUT ALSO RE-ORIENTATION, AWAY FROM THEIR FORMER COLONIAL MASTERS AND THEIR ALLIES, AND APPROACHING NEW TRADING AND DEVELOPMENT GROUNDS. THIS SHOULD NOT HAPPEN THROUGH MILITARY COUPS, BUT AS DECISIONS OF ENLIGHTENED CIVILIAN GOVERNMENTS.
APART FROM THE LACK OF REALISATION THAT THE DEVELOPMENT OF THE GHANAIAN ECONOMY MUST BE CLOSELY CONNECTED WITH THE INTEGRATION INTO THE AFRICAN SCONOMICAL DEVELOPMENT, AND MUST BE SEEN IN THE CONTEXT WITH THAT, THERE IS NOT MUCH WRONG WITH THE ANALYSIS. WE WILL SEE IN LATER ARTICLES WHETHER THE PROGRAMME CAN SOLVE THE DEFINED PROBLEMS EFFECTIVELY.
NOW WE GET TO THE INSTITUTIONAL ARRANGEMENTS WHICH ARE SUPPOSED TO BE THE BACKBONE OF THE WHOLE PROGRAMME.
UNFORTUNATELY, IT SEEMS THAT LARGE PARTS OF THE INSTITUTIONAL ARRANGEMENTS HAVE NOT YET BEEN ESTABLISHED, OR EVEN STARTED TO BE INITIATED. THAT ACCOUNTS ESPECIALLY FOR WHAT IS CALLED “AUTHORITY” IN THE PROGRAMME, AND FOR THE PROPOSED STRATEGIC VALUE CHAIN DEVELOPMENT FUND.
THE “AUTHORITY” IS SUPPOSED TO DIRECT AND COORDINATE THE INITIATIVES SUGGESTED BY THE PROGRAMME.
HERE, A PROBLEM OCCURS AGAIN WHICH I HAVE ALREADY MENTIONED IN MY FIRST ARTICLE: THE METROPOLITAN, MUNICIPAL, AND DISTRICT CHIEF EXECUTIVES (MMDCES) ARE SUPPOSED TO TRANSLATE THE PROGRAMME ON THE LOCAL LEVEL. HERE, THE DANGER ARISES THAT THE MMDCES HURRY TO GRANT PERMITS FOR BUSINESSES THAT WANT TO WORK 24 HOURS SHIFTS WHICH DISTURB THE NEIGHBOURHOODS (BEER BARS, RESTAURANTS, ETC.). HERE, SOLUTIONS SHOULD BE FOUND WHICH PREVENT THESE INCIDENTS FROM HAPPENING.
ON THE OTHER HAND, THE STRATEGIC VALUE CHAIN DEVELOPMENT FUND IS MEANT TO SUPPORT THE VALUE CHAIN FINANCING FACILITY AND AN EXPORT BONUS FOR EXPORTERS OF GHANA-MADE PRODUCTS. A 2.5% IMPORT LEVY WHICH SHOULD FINANCE THE TWO FACILITIES IS -ACCORDING TO OUR INFORMATION – ALSO NOT YET IMPOSED. INSTEAD OF THIS, THERE ARE ALREADY SEVERAL LEVIES ON IMPORTED GOODS IN EFFECT, AND THE QUESTION ARISES WHY NOT PART OF THESE LEVIES IS USED FOR THE INTENDED FACILITIES.
MOST OF THE OTHER INCENTIVES MENTIONED IN THIS CHAPTER OF THE PROGRAMME DEAL WITH TAX INCENTIVES FOR THOSE BUSINESSES WHICH JOIN THE 24H+ PROGRAMME IN PRODUCING GOODS FOR LOCAL USE AND EXPORT. AGAIN, WE MUST ASK HOW THE TAX CANCELLATIONS FOR THE INCENTIVES WILL BE COMPENSATED, AS THEY ARE IN FACT FIRST OF ALL A LOSS IN REVENUE, BEFORE IT CAN BE CLEAR WHETHER THE ECONOMY BENEFITS FROM THE LOCAL AND EXPORT PRODUCTION. FURTHERMORE, HAVE THE BUSINESSES THE CAPACITY TO PERFORM THE PRODUCTION. THE CHANGE FROM A ONE-SHIFT PRODUCTION TO A TWO- OR EVEN THREE-SHIFT PRODUCTION ALONE DOES NOT SOLVE THE PROBLEM. AN INCREASE IN PRODUCTION NEEDS A LOT OF FRESH INVESTMENT WHICH CANNOT BE DONE BY AN EASIER FINANCING ALONE. INCREASED SHIFTS ALSO NEED AN INCREASE IN STAFF – WHAT THE GOVERNMENT RIGHTFUL WANTS – WHO WANT TO BE PAID. IN THE U.S.A. THE GOVERNMENT HAS THE SAME KIND OF PROBLEM WITH ITS ATTEMPT TO BRING MSNUFACTURING BACK INTO THE COUNTRY.
THE PROGRAMME SUGGESTS A CHANGE IN POLI CY TO INCENTIFY NATIONAL VALUE CREATION. THESE ARE NICE WORDS, BUT WILL THIS CHANGE BRING AN EQUAL CHANGE IN THE MINDS OF THE BUSINESS OWNERS AND WORKERS WHO WANT TO HAVE FAST RESULTS FOR THE BUSINESSES?
LOOKING AT THE WHOLE “CONTEXT AND INSTTITUTIONAL ARRANGEMENTS” CHAPTER WE CAN SAY THAT THE PROGRAMME ITSELF SEEMS TO HAVE CORRECT AND GOODAPPROACHES, BUT FACES ENORMOUS CHALLENGES CAUSED MAINLY BY FINANCING ISSUES. WE WILL SEE IN THE NEXT ARTICLES – ESPECIALLY THE ONE CONCERNING THE FINANCING SUB-PROGRAMME – WHETHER THIS ASSUMPTION IS CORRCT,OR WHETHER THE GOVERNMENT FINDS FEASIBLE SOLUTIONS TO FACE THESE CHALLENGES.
THE NEXT ARTICLE WILL EXAMINE THE STRATEGY OUTLINED IN THE PROGRAMME, BEFORE WE GET TO THE VARIOUS SUB-PROGRAMMES IN FURTHER ARTICLES.
