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Feature Article of Monday, 18 August 2008

Columnist: Simons, Bright B.

Bottom-Up Industry the Way to Go for Ghana?*

Most of Africa is in a deepening state of de-industrialisation.

Even mighty South Africa, once a contender in the same leagues as Brazil and Israel, with its nuclear bomb-making antics and machine fabrication edge, is today in a subtle retreat from manufacturing into the comforting arms of financial services and tourism (upswings this year are from a historical low base).

What is to account for the rapid shrinking of industrial capacity in sub-Saharan Africa?

The reasons are manifold, and reasonable people can contend vigorously which are causes and which are effects. All the same, one thread runs through the post-colonial experience of African industrialization. Upon attaining independence, most African states rushed to implement industrial policies that vastly overstated the capacity of existing infrastructure, market development, and sometimes even managerial and technical resources.

The results are evident in places like Ghana and Tanzania where almost none of the factories and plants set up at independence as part of an import-substitution drive are today operational.

Frequently the drive towards installing manufacturing capacity was fuelled by the grandiosity of political dreams and the strategies themselves were usually left to the smothering care of hand-wringing bureaucrats. Grand blueprints predicted raw material supply trends for decades ahead, second-guessed results from complex educational reforms, balanced contradictory demands of donors and voters, and reconstructed in the abstract dominant patterns in consumer behavior and tastes.

What evolution has occurred still smacks too much of top-down revolutionary thinking – clearly oxymoronic.

I was therefore happy to hear about the SMIDO initiative in Ghana's second city of Kumasi, where I spent part of my childhood.

SMIDO stands for Suame Magazine Industrial Development Organisation.

Suame is a major suburb in Kumasi. "Suame Magazine" (SM) is a huge sprawl somewhat plastered centrally across a huge swathe of Kumasi's middle. As far as most folks can remember, SM has been an amazing labyrinth of garages, workshops, tool shacks, machine mini-marts, outdoor laboratories, greasy foundries, and assorted furnaces-on-wheels. It is a place awash with urban myth, and steeped in a changeless flux of activity. What that means is that the hum may never stop, yet regardless how long one stays away, on return SM always feels and looks the same.

Some 200,000 artisans, salespeople, technicians, and garage operators – the four main classes of inhabitant - supply the ceaseless buzz, and sustain SM's formidable reputation as the Shop that never lacks. Regardless your mechanical woe, particularly if it is auto-related, rest assured that a cure is lurking somewhere in the nooks and crannies of Suame Magazine.

Left to fend for itself by successive governments and municipal administrations, Suame Magazine has enjoyed a steady, if unspectacular, growth over the years. Guilds, corresponding to the aforesaid classes, have emerged to champion the self-interest of members, and evolve efficient and interesting governance systems to preserve the general harmony.

The 'hierarchical system' is anchored around the age-old practice of the 'master craftsman" and his 'apprentices'. The choice of pronoun was deliberate: the gender balance is overwhelmingly tilted to the male of the species.

In many ways, the continued survival of Suame Magazine over the decades may be held to demonstrate the truth of the notion that where spare resource is lacking and economies of scale unlikely for any number of reasons, decentralized development is often the best guarantee of industrial growth.

Without much in the way of master-plans, the artisans and technicians, and other SM folk, have continued to maintain their relevance to the people of Kumasi and further afield. They have by and large managed to maintain a pool of skills relevant to the demands of the market, and by a whole variety of trust mechanisms also maintained a consistent quality-level for their output to the general satisfaction of their customers.

But it has become obvious to the most far-seeing inhabitants of this remarkable enclave that not for very long will they able to shelter from the general malaise in Ghanaian industry.

Already small-scale artisans like carpenters and SME industries like steel foundries in other parts of the country have begun to suffer from raw material supply disruptions. Anloga (pronounced Anwunaga), another industrial community in Kumasi focusing on woodwork, is reported to be in the grips of a wood shortage. The reason is that the woodworkers are in stiff competition from importers in Europe and the USA who prefer to buy raw lumber rather than treated wood. Many of the saw mills in Ghana's tropical belt are going out of business as wood harvesters prefer to sell directly into the export market than to domestic traders.

In Agbobloshie, a market sprawl close to Accra's center, a booming scavenging business on the back of a e-waste dumping site is said by media houses in Accra to be feeding on the scarcity of scrap metal for small-time foundries who do not work with ore. Waste computer accessories are thus hand-recycled for their copper and aluminum components by unprotected child workers who are compelled to ignore potential lead and cadmium poisoning.

All these different pieces belong to the same kaleidoscope: industry "settling to its own level" in Ghana. The SMEs and BOP operators appear better positioned to navigate the complex raw material, market need, and supply chain dynamics than industry run according to some standard template of industrial practice. The incessant flux is nevertheless fraught with deep anxiety. The constant evolving of market conditions reflect a decentralization of risk that allows a greater survival rate for entrepreneurs in general but removes any guarantee for individual market operators.

SMIDO is Suame Magazine's response to this state of affairs. The organization appears keen on exploring the opportunities afforded by decentralized industry, but is visionary enough to want to use the guild system to underwrite the resultant and emergent risks.

The long-term strategy of SMIDO is to turn Suame Magazine into an industrial village befitting the 21st century. It appears though that this foresees a multi-site future for the enclave as land is being acquired well outside the historical bounds of SM. A showcase workshop and ICT library at the SMIDO HQ near SM are the early fixtures in the coming landscape. The workshop prefigures the use of modern, maybe even cutting-edge, machinery and tools to boost the productivity of the artisans and technicians in the enclave. Needless to say, such modernization will imply a significant departure from the current case of increasingly outmoded equipment.

UNIDO is committing funds to the project. The Sachs-inspired Millennium Cities Initiative as a means for communities to achieve the MDGs is the overall context.

One can only hope that SMIDO will be continually mindful of the two forces it ought to balance: decentralized development and risk-pooling, and the threat it needs to keep at bay: top-down blueprinting. My view is that so long as that balance is kept in view, Suame Magazine will blossom into a spectacle of industrial glory, improving the lives of nearly a million people in Ghana in the process.

So, I am less than happy with the sudden enthusiasm of politicians to associate with the project. If their bureaucratic tentacles begin to caress the initiative, as history has shown, only Gods and Titans can save it from eventual suffocation.

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*Bright B. Simons is affiliated with www.AfricanLiberty.org* Original Source: http://www.justmeans.com/allthings/111/Industry-from-the-Bottom-Up.html

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