Despite the drawbacks of market economy, Ghana's global image has been bolstered by its decision to operate the system, says its Minister of Trade Alan Kyeremanten, during an interview with Africa Today's Martin Luther King.
Africa Today: What has Ghana gained so far from operating the market economy?
Kyeremanten: First, Ghana has gained credibility within the context of international economic governance. Ghana has committed itself to a market-based liberal economy. It is very important that we consider ourselves not as an island but as part of the global community. That's the only way that we can take advantage of the opportunities that globalization offers. And if that is the context or the milieu that we want to position ourselves in, then obviously, the only language that is spoken in this environment is that. There is no doubt about the fact that there are many serious challenges.... there are no doubts about that.Africa Today: What challenges?
Kyeremanten: Obviously for developing countries, the more open you are in terms of your market economy, the more liberalized your dealings, the more you expose your own local economy to global competition. There's this argument that developing countries are unable to compete because there is no level-playing field within the international, global economy. And, therefore, if you open up your market, and there is no level-playing field, then obviously, that may prejudice the success of your own local industry. However, it is a balancing act. I believe that you cannot, as it were, negotiate out of this open market environment. What you need to do is to be able to support your own local industries, your own local companies, to be able to get more competitive. So, I don't find it paradoxical to say that if you believe in this liberal, open market economy, but within that context, you have to be able to support the local companies to be able to compete.So the opportunity that we have can only be optimized if we have an outward-oriented economy. And, so you cannot seek to develop an outward-oriented economy and then still have a protectionist or a closed economy. And I know people feel very sensitive about this, but the truth of the matter is that you have no choice. If you want to participate in the global economy, you need to know the architecture of the global economy. Now, however, within that architecture, you can still have a way of protecting your interests, you know, by supporting your companies to get competitive.
Africa Today: When President Kufuor assumed office in 2001, he promised to transform Ghana into a middle-income economy by 2015. Five years on, how much of that promise has been achieved?
Kyeremanten: The way I would like to look at it is that it was a statement of vision. That is what we want to do. That this is where we want to be. That is what we hope to achieve. So, obviously being a statement of vision, how we get there is the process. And, to a large extent, the milestones that were developed to be able to get to this final destination should be the benchmarks that would be used to measure how far we are progressing. To that extent, I believe that we are very much on track. Because for us to become a middle-income country, we need to do a lot of things: First, we need to have a stable macro-economy that is founded on, I will say, strong, sound economic policies and programmes. There is no debate about the fact that we have achieved significant success in this regard. Now, we are moving from that platform to a new agenda of growth, accelerated growth. And I believe that once get to that second stage where we can talk about accelerated growth. Then we will start a third stage, which is consolidation. So, we start with the stabilisation programme. We move into a growth stage. And, to the final stage which is consolidation stage which will then, I believe, take us to this middle-income status that, I believe, our President talked about.Africa Today: What is the President's Special Initiative all about?
Kyeremanten: When the new government, the current government took over in 2001, there was a strategic need to identify new areas of growth for our economy. As I am sure you are aware, for over a century, Ghana has had to depend on two export commodities for over 80 percent of our export payment - cocoa and gold. Now, if you were looking for the way forward in terms of growing the economy, obviously you cannot be doing the same things that you have done for over a century. So it became obvious that we needed to identify some areas of growth for our economy. And, I worked with the President to identify these areas of growth and as a branding strategy we decided to call them the President's Special Initiatives. And it was not a cosmetic effort at branding. It was meant first to demonstrate that these efforts at developing new sectors of growth had the blessing of the President, or that they had the highest levels of executive commitment. And that we were prepared as a country to more or less ensure that these new efforts succeeded. So, we identified four new areas. One was the development of industrial parks, commercial parks for cassava, the oil-palm industry and then the salt industry. So these were the four new sectors that were agreed on. And if you look at the philosophy underpinning the selection of these sectors, it's very interesting because, one, we identified sectors that had export appeal...and people were familiar and comfortable with these sectors. Secondly, they were sectors that we believed would have a multiplier effect on our economy. Thirdly, they were sectors which had the potential of generating significant levels of employment. Four, they were sectors that were recognized and acknowledged for significantly also transforming our rural economies. Fifthly, these were sectors that had the potentials of significant foreign exchange earnings. So if you put all these together, then we were convinced that we had made a right choice. So it's not a question of 'you could have selected that, or you could have done some other things'. But it's a combination of the criteria that I earlier talked about.Africa Today: How are you faring in each of these of special sectors?
Kyeremanten: Let's begin with the oil-palm industry. I would start off by saying that Malaysia literally borrowed their first seedlings for their oil-palm industry from Ghana. Now they have been able to generate billions of dollars, you know, export earnings, from oil-palm. Now in Ghana, we were unable to take advantage of the early start that we had in the oil-palm industry. So, looking at what Malaysia has been able to achieve, this should be a challenge for us in Ghana to, more or less, catch up with countries like Malaysia. And so, I'm proud of what we've done to harness, or aim at cultivating thousands of oil-palm. And, particularly making sure that government participates in this process by providing the right talents to support the sector to develop, by providing the right practice materials; and, also, by facilitating access to finance for those who want to go into this industry. In their hundreds and thousands, Ghanaians are now engaged the oil-palm industry. And I can assure you that in the near future, when they are talking about being committed to the oil-palm industry, Ghana would be one of the first three. In cassava, or industrial starch sector, Ghana has over 20 percent of our agricultural output coming from cassava alone. This means that we have no choice but to do something about cassava. So our efforts at developing an industrial starch production have also been remarkable. We started with a pilot plant which produces, or which tried to produce ten thousand tonnes of starch per annum. And when we started with this project, we were able to supply cassava to an industrial park. And this park is actually owned by...those who supply cassava to the factory. Now, the beauty of this is that we've been able to get accreditation, or call it certification, from Nestle International and from Unilever to supply industrial starch to Nestle world-wide. And I don't think there are too many companies in Africa that have the certification to produce the raw materials input for the production process of a global conglomerate. So, that in itself speaks volumes. And I'm proud to say that we've been able to provide technical support and guidance to our friends from Nigeria. ... On garments and textiles, we have established what we call a Garments Village.Africa Today: Where?
Kyeremanten: In Tema. It is specifically targeted at providing, I will say, industrial support and technical assistance-marketing support for companies, both foreign and local. And in terms of packaging of these garments and textiles. And I think selected companies ...because if you look at the experience of all industrialized countries, that's where they started from. Hopefully, we shall get to a point where we stabilize things. So far, we have two production enclaves: one at the Tema Free Zone. And, one in Accra. And we have been able to attract some foreign companies to Ghana and, probably, more will come. We are trying to concentrate on developing our own indigenous entrepreneurs to set up factories.Last but not the least, the salt initiative. As you know, in the whole of west Africa it's only Ghana and Senegal that have salt. And in terms of the market, it's so huge that right now, we are not able to supply enough even for the Nigerian market alone. We have the capacity to mine over three million metric tons of salt. Unfortunately because of the fact that we never identified salt as an industry, we tended to neglect it. Having said that, this initiative is meant for us to put things right. And as you know, salt is for the petro-chemical industry in the production of caustic soda, So these are the core sectors for the President's special initiatives.
Africa Today: At a time when the private sector all over the world lead their respective countries' economies, it seems like the opposite is happening in Ghana. How do you explain this?
Kyeremanten: I agree with you entirely. From what I have said of what we are doing in Ghana, it looks like we have an active, sorry proactive government involvement in development. Now, I think that it is not contradictory. Because what government is doing is to point the private sector to certain opportunities which have, otherwise, not been explored for many years. Government, I believe, has that responsibility to support the private sector to be able to do it well. So we are not talking about taking over. All the enterprises that I have talked about that have been made under the President's Special Initiatives are all private-sector-formed companies. Both local and foreign. But here you see an example of government being very committed and active in making sure that whatever it takes for the private sector to succeed, the government is ready to do it.So in terms of context engineering, to market identification, to possibly giving access to finance, to providing R&D support and also making sure that any difficulty with regards to regulatory and policy bottle-necks that would impede their progress, that those would be addressed by government. So, I agree with you that it sounds like government is playing a very active role. But I believe that that is the right direction.
