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Opinions of Friday, 18 February 2011

Columnist: Sakyi, Kwesi Atta

Self Reliance In The Ghanaian Economy

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Gandhi or Gandhiji was a national hero in India during the struggle for
independence in India in the 1940s. He taught Indians to grow their own food,
make their own clothes and even produce their own salt. That lesson he taught
Indians has bore fruit as India is one of the emerging economies known as the
BRIC countries (Brazil, Russia, India, and China). South Africa may soon join
it to become BRICS. We need similar home-grown strategies in Ghana so that we
drastically cut down on imports. Nkrumah tried to establish an industrial and
intellectual property base for Ghana but unfortunately his efforts were
shortlived. He established factories such as Match Factory at Kade, Corned Beef
Cannery in Bolgatanga, Fruits and Vegetables Cannery at Nsawam, Textiles at Tema
and Akosombo, Cement Works at Tema, Oil Refinery at Tema, Flour Mills at
Takoradi and Tema, Jute factory in Kumasi, among others. He wooed and brought
in foreign business tycoons such as one Drevici and there was the famous
Savundra case. He formed alliances with former communist countries such as
Yugoslavia, Romania and Czechoslovakia. The Czechs established a Sugar Factory
at Komenda and I am sure they sold the Skoda cars in Ghana. The import of this
paper is to reflect on our current situation where Ghana has become a dumping
ground for almost every small item from sewing needles to toilet rolls, rice,
meat, apples, plastics and even confectioneries. Why can’t we be self reliant
by growing our own food and rearing our own animals? Of course, Michael
Porter’s famous thesis of comparative cost advantage stares us in the face.
What we need to do is to decrease considerably some of our imports to create a
sort of autarky or closed economy in order to provide space to grow our infant
industries. I think we need a bit of intervention so that the closed economy
multiplier which has a bigger bang or impact than the open economy multiplier
can work to our advantage. We have not crossed the threshold of full employment
as there is room to grow. If all these items of rice, salt, matches, plastics
and pig trotters were produced locally, what a huge employment it would create.
Besides, we need to focus more on the sunrise industries in the tertiary and
quarternary sectors such as deepening our comparative advantage in the
educational and hospitality sectors. More jobs can be created using ICT
facilities such as having call centres, outsourcing accounting jobs, training
staff online, among others. We can create a Silicon Valley in Ghana where young
IT geniuses can create softwares for export. Given our fertile lands and
fertile intellect for creativity, we stand to gain considerable comparative
advantage if we focus more on the agricultural and tertiary sectors. The mining
sector is a wasting economy and it benefits the multinationals more than
Ghanaians. This is because the powerful and domineering multinationals make
sure that our negotiators fail to get any good deals out of them. Hence, our
natural resources being mined or exploited do not serve us much purpose.
Ghana’s economy, therefore, needs massive diversification away from the
traditional sectors of mining and cash crops into areas of service delivery,
local crafts and agriculture.


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