STATEMENT BY AMBASSADOR EKWOW SPIO-GARBRAH REGARDING VISIT OF J.J. TO U.S.A.

TRANSCRIPT OF STATEMENT BY AMBASSADOR EKWOW SPIO-GARBRAH TO THE MEDIA, REGARDING THE OFFICIAL WORKING VISIT TO THE U.S.A. OF H.E. THE PRESIDENT OF GHANA, FLT. LT. J. J. RAWLINGS ON WEDNESDAY 15TH MARCH, 1995

1. The President of Ghana took advantage of his White House visit to underline to President Clinton and to the other senior officials of the United States that the Liberian problem is not exclusively a West African problem or a Ghanaian problem. Indeed, if you go back into history you will find that Liberia is a creation that had a large U.S. role - at a time when some former slaves were brought back into that country.

Therefore, if today, there is a problem in that country the United States should play a much more significant role than it has played in the past. Of course, this is to be done in collaboration with the United Nations and with the efforts of the Economic Community of West African States which has put together a military force in Liberia called ECOMOG. During President Rawlings' tenure as Chairman of ECOWAS we are hopeful that this conflict can be brought to a speedy conclusion.

2. The Liberian conflict is seen by our President and by our country not merely in terms of what it does for regional stability. We see regional stability as directly linked with our own economic development within Ghana.

The President's call for the United States and for the international community to pay more attention to Liberia is predicated on the fact that Ghana has undergone fairly deep structural reforms over the past 10 to 12 years as most people know. However, a good part of our national resources are currently being expended on this effort to bring peace to Liberia, so the earlier we can have peace in Liberia, the sooner Ghana as a country can continue to grow and advance in its economic development.

3. The President's visit also, as you may know, involved meetings with some other high level officials; among these were Commerce Secretary, Ron Brown; who paid a courtesy call on him at the Blair House. The meeting with Ron Brown again was intended to emphasize the second aspect of the visit. The first area of concern political, with Liberia being an important aspect of it; the second part was economic development, with commerce, trade and investment relations with the United States being the principal focus. U.S. imports-exports with Ghana have been growing over the past several years but in 1994 there was a dip in both two-way imports and exports and the Commerce Department was concerned about how to increase US exports to Ghana.

4. Ghana, for its part is concerned about how it can have easier access to the American market for not only its traditional products such as cocoa but especially for non-traditional export products - textiles, processed woods, handicrafts, vegetables and processed foods - and the discussions with Commerce Secretary Brown basically concluded with a proposal by the Commerce Secretary to pay a visit to Ghana sometime in the latter part of this year.

For this reason the two Departments have agreed to set up a preparatory committee to plan the visit in such a way that it becomes most productive.

5. Commerce Secretary Brown, as you know, when he has visited countries like China, India, South Africa, has tended to go along with good-size number of U.S. business executives. His trips have invariably produced fairly positive results in terms of agreements signed either during or after his visit. So we are looking forward to this particular visit as the first sign of the strengthening of the economic and trade and business relations between Ghana and the United States.

6. The President also visited the Pentagon as you know and had a meeting with Deputy Secretary of Defense, John Deutch, who we now hear has been nominated for the directorship of the Central Intelligence Agency. The meeting at the Pentagon was basically to discuss a little more in the detail the kind of assistance that Ghana needs in its efforts to bring peace to Liberia. The discussions were essentially about the supply of non-lethal equipment and logistical supplies that the Ghanaian armed forces could take advantage of as well as other troops that are operating in the ECOMOG operations in Liberia. The Defense Department was very forthcoming and has planned a series of interactions with Ghanaian military staff to identify exactly what is needed and when such supplies can be delivered to the Ghana side.

7. The President went up to Capitol Hill, and there he had meetings with the House International Relations Committee chaired by Congressman Benjamin Gilman which also included the Sub-Committee on Africa which is chaired by Congresswoman Ileana Ros-Lehtinen. In addition, the Chairman of the Congressional Black Caucus, Donald Payne, Congressman from New Jersey had summoned some of the other members of the Congressional Black Caucus, not all of who are necessarily members of the International Relations Committee to join in the discussions.

That meeting also focused principally on getting Congressional support for foreign economic assistance to Africa, so that within that foreign economic assistance the efforts that the Administration is making to provide both bilateral as well as multilateral assistance to African institutions and Governments can see the light of day.

Specific mention was made during this meeting, as well as in a subsequent meeting the Senate Committee on Africa, chaired by Senator Kassebaum, which was co-hosted by Senator Russell Feingold, that in the fiscal '96 US Administration request to Congress there is a proposal of $18 million for bilateral fund for Conflict Resolution and Peacekeeping in Africa. The Ghanaian delegation was of the view that Congress ought to give the Administration's request very serious attention in order for the kinds of needs that Ghana has in its efforts to bring peace to Liberia to get the necessary funding.

9. Discussions in the Senate focused more on economic development issues and on U.S. economic assistance to Ghana. The role of the AID was underlined and the President and other members of the delegation indicated that Ghana is very satisfied with what AID has done through its support of Ghana's economic recovery and adjustment process.

The Ghana delegation was hopeful that future AID support would emphasize more support for the private sector, and that indeed, AID would look at the possibility of establishing a Ghana Investment Fund or a Ghana Enterprise Fund, through which U.S. public sector institutions as well as Ghanaian companies interested in various projects in Ghana, could get the necessary funding as well as the kind of capital support that can come from both the capital markets and from Ghana's own financial system.

10. The proposal for a Ghana Investment Fund or a Ghana Enterprise Fund was also discussed with the USAID Administrator, Mr. Brian Atwood, when he called on the President at the Blair House. Our impression is that the AID took the proposals very warmly and the Administrator agreed to take up the matter. The meeting with Brian Atwood also brought up the possibility of AID assistance to the value-added industries in our forestry products sector, how to convert forestry products into processed wood and furniture in an environmentally sustainable way. Any other support that the USAID can provide for the protection of Ghana's environment as well as for bio-technology projects was also considered desirable.

11. As you know the President made two major public addresses: one on "Conflict Resolution and Peacekeeping" at the Centre of Strategic and International Studies, (CSIS) an event that was- co-hosted by the CSIS, the Carnegie Endowment for International Peace, and the Constituency for Africa.

His statement there as well as his extemporaneous remarks after the speech again highlighted the fact that the West African sub-region should not be allowed to go it alone in the resolution of the problem in Liberia. The President noted that economies in the West African sub-region are fragile but if communism were to have reared its head in that area, the United States would have been very quick and rapid in moving in very substantial amounts of money.

As in Somalia and Rwanda, the United States has spent a good deal of money in trying to bring about peace and in the humanitarian area, but only after the conflicts have already occurred. The challenge for the international community, especially the United States, is how to resolve conflicts before they do become expensive propositions. So the requirements that Ghana has in Liberia, according to the President's message are very modest compared with what will be needed if things were to be allowed to get out of hand.

12. The 8th of March, the President addressed the Corporate Council of Africa, which had put together a very formidable dinner involving about 200 of the leading business executives operating on the African continent. Our understanding is that this event was the most heavily attended by U.S. corporations of any function organised by the Corporate Council on Africa.

This means that there is a great deal of U.S. interest in investing in Ghana.

This interest has been manifested by a number of recent investments that have taken place and a lot of on-going discussions with Government and the private sector about a wide range of industries. The attendance at this dinner by a number of major U.S. public sector officials such as Commerce Secretary Ron Brown, who came to the reception but had to leave early, Assistance Secretaries of State June Kearney and John Walker, the Assistant Secretary of State Moose, the former Assistant Secretary Mr. Hank Cohen, several Congressmen including Congressman Donald Payne and Congresswoman Sheila Jackson from Houston, we believe, all helped to confirm the confidence that the U.S. government and the U.S. private sector have in the Ghana Government's economic initiatives and in the country's potential for achieving its identified objectives.

13. The President addressed the Ghanaian community at a reception here at the Chancery before he went to the Corporate Council on Africa dinner. His audience included far more foreigners than Ghanaians - both African-Americans and Americans of other ethnic origins as well as Ambassadors from many countries, especially the African Ambassadors. But his message was directed principally at the Ghanaian community. To the Ghanaians, he basically urged them to be confident about the economic developments going on in Ghana today and to invite them to come back and help with the country's economic reconstruction.

14. That is just a brief overview of his visit, and this opportunity has been provided to you essentially to allow you to ask the questions that have been agitating your minds. So the floor is open for your questions and I will be happy to answer the questions.

Question: Reasons for the decline in Ghana-US trade.

15. We have statistics that we can provide to you after this briefing, but essentially between 1992 and 1993 U.S. exports to Ghana doubled from just around 100 million to a little over 200 million. According to the figures that we have, Ghanaian exports to the United States also seems to have doubled at about the same time. So that from about $200 million two-way flow between the two countries in 1992 the figures went up to just about $400 million for both countries in 1993.

However, for 1994, the figures show a very radical dip in U.S. exports to Ghana, which my recollection has at about $88 million of U.S. exports to Ghana and this was the issue that the Commerce Secretary was concerned about deals with U.S. exports to Ghana. We in Ghana as such could not offer them an explanation and they are going to do their own internal analysis to see why exports feel in that period and why there was such a major decline in U.S. exports.

16. One preliminary explanation I was offered was the possibility that the large growth between 1992 and 1993, which can best be described as a 100% increase was more of an aberration rather than a sustainable trend in import/export activity between the two countries. It could have been caused by some large contracts that a U.S. company may have been awarded by Ghana or one of the multilateral banks or agencies or even USAID or OPIC, which were not part of the normal trade flows between the two countries. But we don't know yet.

17. There was a drop in World Bank disbursements to Ghana last year, and there is also the possibility that some of those earlier disbursements that took place could have involved a significant number of U.S. corporate contractors and suppliers. I will ask my Commercial Counselor after this meeting to see that you have some data.

Question: Ghana has taken too many foreign loans and has not spent enough on infrastructure.

18. Well, your question have several parts, but I hope the last part of your question was not how to restore the infrastructure because we say that is where mot of the money has been spent, so I am not sure exactly what you meant.

19. I think your figures are probably inaccurate. It would be most inaccurate to say that whatever has happened in Ghana over the last 10 to 15 years have occurred as a result of foreign loans. It is true that Ghana has had a good deal of international credit over the last 10 years, but I think the international financial institutions, especially the World Bank and the IMF, would be the first to acknowledge that the transformation that is going on in Ghana, which is not yet complete and not yet entirely successful, but only relatively successful, is due more the resilience of the people of the country and the hardwork of the people themselves and their leadership.

The Government has put in place mechanisms for domestic revenue generation beyond merely seeking foreign loans per se. This is because you can throw money at any problem, but if the officials that are managing the money are not able to manage it efficiently and effectively, (and we have examples in other parts of the continent, where moneys have been thrown at countries that did not manage it efficiently), then you don't get the results that you deserve.

And indeed, I may have overlooked in my briefing the fact that the President did meet with one of the Managing Directors of the IMF, Mr. Stanley Fischer and also with the inter-agency group from the World Bank Group, led by Mr. Kaji, one of the Managing Directors. The delegation including Mr. Lindbaek, Executive Vice President of the IFC; Mr. Jaycox, Vice President for Africa and Mr. Akira Iida who is the Executive Vice President for the Multilateral Investment Guarantee Agency (MIGA).

It was important to underline that meeting because it may have been the very first time that the leadership of the World Bank Group as such have met with a Head of State as a group. There has been a tendency in the past for them to meet independently of each other, with each institutional looking for their own specific appointments, but we insisted that this meeting should be held together so that the group can adopt a Bank Group-wide strategy for dealing with Ghana's economic reconstruction.

Those discussions concerned rural finance, private sector development, the divestiture programme, the role of independent contractors and managers of infrastructure, especially in roads, telecommunications and the energy sector. The need for the World Bank Group to assist Ghana to focus more on investment promotion, including the idea of a Ghana Investment Fund, were also discussed with the Bank. The main issue with the Fund is how to reduce inflation in Ghana.

20. But to come back to the specific point you have made, and I can come back to the World Bank meeting, if any of you are interested. It is also a fallacy to say that 98% of the goods in Ghana are foreign. I don't know where you get those figures from. 40% of our budget goes to education, and as you know it is only a certain segment of our budget that is foreign economic assistance. Ghana has gotten in the last 4 or 5 years on the average, between 800,000 to a million dollars in pledges of foreign donor economic assistance, some of which will not materialize for a variety of reasons. In other words, they are not all actually disbursed even though they may be pledged at the Paris Club.

21. Ghana is a country with a GDP of about $7 billion, so if about a billion dollars is pledged by the foreign donors and the GDP is 7 billion, then you can figure it for yourselves whether the large components of the country's economic production is based on foreign loans or comes from internal resources. It will be a fallacy to say that Ghanaians do not generate any incomes themselves, or that farmers do not produce unless there is a loan from the World Bank, or that artisans and fishermen take loans from the World Bank to go fishing, they do not.

So the majority of farms in Ghana, the majority of the fishing activity, the kente weaving and the handicrafts are what actually make the economy move. The market women who are selling in the market are not using World Bank loans to do so. But yes, the World Bank loans have come in to help with infrastructure, to build roads, to assist in the energy sector, in telecommunications, to rehabilitate some hospitals and to also support education reforms as well as for the overall macro-economic reconstruction of the economy.

22. In the process, the country has liberalized the trade and foreign investment regimes, as well as a variety of other related regimes. And it is this aspect of trade liberalization which addresses the point you have made that there is a perception within certain segments within Ghanaian industry that they are facing severe competition from foreign imports and as a result are unable to compete effectively or in some cases, are losing market share.

23. The purpose of trade liberalization is to make domestic production more competitive as well as to reduce the price of goods that the consumer has to pay. A country can protect its industries and put up all kinds of tariff barriers to protect your local industries and allow them potentially to become monopolies within the economy. But what that does is that because there may be a lack of alternative products or goods, the prices of these domestically produced goods can go as high as the supplier wants to make them.

A liberalized import regime allows the consumer to have a wider degree of choice, it also therefore reduces the price of goods to the consumer, and helps inflation to come. For those companies that are unable to adjust effectively, this may drive them either out of business or at least reduce their market share. It is a challenge that the Government as well as the private sector are both seriously in day-to-day consultation about. As we know, one of the things that the Government has done is to bring the private sector very aggressively into the economic decision-making process.

24. The Ghana Investment Promotions Centre law that was passed last year was done based on advice provided by the private sector in Ghana. There is a Private Sector Advisory Group with which the government consults regularly, there has been created recently the Private Enterprise Foundation, which again is supported by the Chambers of Commerce and Mines, by the Ghana Employers Association, the Association of Ghana Industries, who altogether form an inter-phase between the private sector and the government to ensure that the kinds of concerns that you are raising about competition for made-in-Ghana products are addressed.

25. The President made a very important point about the role that the private sector plays by including in his delegation of less than 12 people a two-member team of the private sector, made up of Mr. Sam Jonah, the Chief Executive of the Ashanti Goldfields, which, as you know was privatized last year to turn the company into a billion-dollar organisation. And also Mr. Ishmael Yamson, who is the chairman of the UNILEVER Group in Ghana - one of the largest and one of the oldest foreign trading and investment concerns in the country - was in the delegation.

So the fact of his including these people in the team was one of the messages that he wanted to convey - that the private sector is very important to Ghana, and people like you who could use these goods and services, and who would therefore be very concerned about issues that you have raised about competition for Ghanaian goods.

These two private sector representatives sat through the President's meetings and were able to see for themselves the efforts the government is making to protect those industries in Ghana.

26. The privatization drive in Ghana again is one channel through which the government is making available to the Ghanaian private sector the opportunity to own enterprises that were hitherto in the state sector. The Ghana National Trading Company, for example, which had at one time probably nearly one hundred distribution and retail outlets throughout the country is being sold. More or less, piece-by-piece, to interested private organisations. Companies such as the Nsawam cannery, which is a food processing plant has just been sold to a private group. So, through all these processes, the Ghanaian indigenous entrepreneurs are being given the opportunity to own very important sectors of the Ghanaian economy.