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Feature Article of Sunday, 3 June 2012

Columnist: Jeffrey, Peter N.

The Rise of Tamale and its role in Ghana’s Economic development.

Tamale, Ghana’s third largest city and the fastest growing metropolis in the West Africa sub region could generate 50% of new jobs, produce almost half of Ghana’s gross domestic product and drive a near threefold increase in per capita income in the country in the next decade says a report.

With the discovery of gold in the northern sector of Ghana, it is estimated that Tamale’s gross domestic product may exceed that of Burkina Faso and Mali by 2025. With an annualized GDP growth rate of 7.6% over the past three years, Tamale has emerged as the fastest growing city, ahead of Kumasi, Ghana’s second city.

Economists and Chief Executives traced Tamale’s good economic performance to the trust and confidence in the leadership of Tamale Metropolitan Assembly under Alhaji Friday. According to Alhaji Abdullah Haruna Friday, Metropolitan Chief Executive of Tamale, the robust economic performance for 2011, which is well within the forecast of 7 to 7.6%, implies that the domestic economy of northern Ghana could be on its way to higher growth trajectory.

Alhaji Friday is confident that the country’s rapid economic growth will be sustained in the coming years due to ongoing social programs, Ghanaian diaspora remittances, income from oil and other natural resources and foreign direct investments. He said, “All these things taken together, we expect to help keep a healthy economy”.

Alhaji Friday noted that Ghanaian Diaspora remittances, which are fourth highest foreign earner, have not taken a hit after the global financial crisis and thus have contributed to strong domestic demand. He cited the rapid growth in agriculture produce as a major contributor in the strong performance by helping boost exports and revive key industries.

He stated that better weather towards the end of 2011 helped the struggling farming sector, pulling up the agriculture sector to a growth of 2.5 in the final three months of the year after drought and rain storms led to negative growth in the previous quarter.

Alhaji Friday stated that other growth drivers include the services sector, which contributed 3.1 percentage points to GDP growth, boosted by strong performance of trade and private sectors, complemented by flourishing domestic investment, business process outsourcing, hotels, restaurants, import and export trade and wholesale and retail trade.

He said Tamale and Ghana’s economic growth over the last decade has been quiet remarkable. Real GDP growth was approximately 7% annually over the period, driven by a combination of rising investment, remittances as well as consumption demand and greater productivity growth.

Alhaji Friday said Ghana will play an increasing role in sub-Saharan Africa’s economy as demand d from a growing working-age population will continue to drive consumption demand. He said Ghana has become the de-facto headquarters of most multinationals due to its stability and educated workforce. Alhaji Friday said Tamale is slated to become West Africa’s largest economic hub.

Aviation industry is set to double its contribution to the country’s Gross Domestic Product over the next five years as economic growth and rising disposable incomes encourage Ghanaians and West Africans to spend more on travel. Tamale, being the most central city in the West Africa sub region, experts says by upgrading its airport to international standard, growth of the aviation industry is crucial to the economic growth as it has multiplier effect on job creation. Surrounded by large Muslim population in the north, Tamale is expected to see high passenger growth of over 15 percent (and 90 percent during the haj season) in the next two decades. But the growth potential can be fully realized only if Tamale airport is transformed to fully fledge international airport able to accommodate larger aircrafts, including Airbus 380 and Boeing 777 Dreamliner.

The country’s GDP growth has grown steadily since the late 1990s, after the President Rawlings initiated the Structural Adjustment programs and economic liberalization policies. Rawlings and Kuffour’s reforms reduced tariffs and interest rates, terminated public monopolies and allowed approval of FDI in many sectors, plus encourage remittances of Ghanaians in diaspora.

According to Alhaji Haruna Friday, an interesting experiment, started by the Kuffour administration and being continued by Mills government, is going on which marks a clear departure from the Rawlings miracle years of the past.

He stated that Ghana is vast and diverse country with very interesting ethnic mix but more united than most countries in sub-Saharan Africa. Talking to Alhaji Friday in his office in downtown Tamale, the metropolis simply stunned and overawed this writer. Tamale is fast emerging as the most modern and high-tech city, a cosmopolitan city with great future and potential.

Like other regional capitals in Ghana, in Tamale, it is a sense of vibrancy, wealth creating enterprises, an emerging middle class and the very modern living standards, a first class medical school of University for Development Studies.

After years of economic stagnation, Rawlings adopted in 1986 a program of broad economic reforms which introduced new market rules, opened up to a greater degree of Foreign Direct Investment (FDI) and improved business climate. The reforms under both Rawlings and Kuffour administrations brought about profound changes in the Ghanaian social fabric. Cities like Kumasi, Accra, Sunyani, Ho, Sekondi-Takoradi and Tamale were given great deal of control and influence over their economic activities under the local government de-regulation.

Since 2000 Tamale’s economy has been in a slow but sure transition from rural agricultural type system to market economy. Tamale is now on track to exceed the lower-middle benchmark of $6,000 in the near future and thus enter the group of cities with medium to high income ratings.

Tamale Metropolitan Assembly, under Alhaji Friday’s leadership, is committed to creating jobs through public private partnership to meet the challenge of a highly educated young workforce that grows by over ten thousand people every year. Alhaji Friday explained that growth policies nationwide have created grave problems in all sectors, including housing.

He further stated that for Tamale and the country as a whole to offset the negative impacts such as higher unemployment rates, especially among the youth, the quality of infrastructure and institutional capacity must be further expanded and improved. Alhaji stated that when all is said and done, Ghana’s economy is still held in high esteem within the business community and Tamale in particular, mainly because of its high growth rate and overall macroeconomic stability in the country, two fundamental conditions required for sustainable economic development.

Alhaji Haruna Friday said with the economic development in the country gathering momentum, the increased flow of FDI and remittances from nationals abroad, a more balanced and pragmatic trade policy and access to foreign markets will be conducive to creating appropriate conditions for Ghana’s economy to take off.

He said as the leader of Tamale Metropolitan Assembly, he is at the forefront of the fight in poverty reduction by improving social services and health. He advocated for the decentralization of ministries to the regions. He said part of this need is fueled by the rapid economic growth, which in turn, has led to some social challenges, especially in the regional capitals, including Tamale.

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