A country on the march Focus on

Kufuor We are on course Focus on Ghana A country on the march

that their place in history is assured. Not all Ghanaians will agree though. They measure prosperity by the depth of their own pockets. Since their pockets are not yet full, or Ghana at a glance even half empty, nothing therefore has changed since Kufuor came into office. “Things are still hard” is a popular refrain in Accra and beyond. Land area: 92,100 sq miles (238,537 sq km) And they have reason. A nation is the aggregate of the people in it. Capital: Accra If a nation is doing well, according to the law of averages, the people Independence: 6 March 1957 in it must be doing well as well. If the people are not doing well, then System of government: Multiparty democracy/parliament something is wrong somewhere. President: John Agyekum Kufuor That is the paradox, nay dilemma, facing the millions of Ghanaians Ruling party: (NPP) who say “things are still hard”. But don’t tell Yaw Osafo-Maafo, Kufuor’s Next elections: 7 December 2004 finance minister. As he told parliament on 5 February when reading National population: 20 million the 2004 budget: Languages: English is the official language. Local languages include Akan “The is in a more sound and healthier condition (Twi, Fante), Ga, Ewe, Dagbeni, Hausa today than it has been for decades ... The indisputable fact is that Religion: Christians 43%, Muslims 12%, Traditional 45% people are eating better, schools, health facilities and transportation Currency: Cedi, divided into 100 pesewas are improving apace, and the economic environment is definitely more Main exports: Cocoa, gold, timber stable ... Within the short period of three years, we have been able to Government website: www.ghana.gov.gh turn the fortunes of this country from a rather desperate position to a very hopeful state … All the macro-economic indicators are pointing in the direction of robust and sustainable development … GDP growth rates in the last three years have been on the ascendancy achieving Ghana’s rich traditions will 4.2% in 2001, 4.5% in 2002, and 5.2% in 2003. And we expect to, at be at the centre of a major least, maintain it at 5.2% in 2004.” tourism drive in 2004 In fact, two weeks before Osafo-Maafo’s budget statement, President Kufuor himself, in his ‘State of the Nation Address’ on 22 January, had said as much, in so many words: “For the past three years,” he told the nation, “we have initiated and implemented policies aimed at halting the downward slide of the economy and kick-starting its growth.” “And indeed we have,” Osafo-Maafo added for good measure. And these are not empty words. The facts on the ground, and on paper, are there to prove it. In the world of economics, there are certain variables or indicators that show whether a country is doing “What a delight, Ghana” well or not. Ghana’s indicators, under Kufuor, are all pointing up — in the right direction. That is not to say the country is out of the woods yet. Far from it. As Ghana celebrates 47 years of independence on 6 March, Baffour Ankomah, In fact, Kufuor’s government is not even claiming that it is. However, editor of ‘New African‘ and a Ghanaian himself, looks at how the country has those who know what makes an economy tick, like Paul Victor Obeng (PV for short), one of the leading lights of the Rawlings era, Ghana fared under President John Agyekum Kufuor’s three-year-old government. has not done badly at all under Kufuor. “Though there are areas that a lot could be done,” PV said last year in a rare praise of the political opposition now running the government, he headline above belongs to Peter Jazzy Ezeh, a hard-nosed peaceful, and green. Cedi may be relatively weak but it is better than “so far, the management of the economy has been sustained well. They Nigerian and long-time ‘New African‘ correspondent based in everyone who had been around told me it was some years back. Your couldn’t do any better than they are doing, having taken over at a very Enugu. He went to Ghana for the first time this February to deliver borders are the ones no one extorts bribes. I came back by road so that difficult time in our history as a nation.” a paper at the W.E.B. du Bois International Cultural Centre in Accra. I could look at that aspect too. As an African, I am proud of the Ghana PV, speaking in a radio interview, continued: “It will be miraculous After returning home on 10 February, he sent me the following that I experienced.” for anybody to expect that after just 24 months in office, significant eye- ACCRA Temail from Enugu, about his impressions of Ghana: Encomiums do not come easily from Peter Jazzy Ezeh. He is a hard catching prospects will be recorded by the new government.” “What a delight, Ghana,” he wrote. “I was in your country. And how Ibo man, and one of those Africans with licence to criticise Africa to death. Today, 39 months into its 48-month term, and as Ghana celebrates 47 Cape Coast heavenly! No hyperboles intended. The surprise is that some of you For him to be so lavish in his praise for the Ghana he saw, is very high years of independence, Kufuor’s government can proudly point to dozens are still outside. I don’t remember having been to any place as orderly, praise indeed. President Kufuor and his government can retire knowing of “eye-catching” achievements already firmly bagged away. Takoradi

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and fair conduct of the elections. Last year, the Electoral Commission (EC) announced that it would create 30 additional constituencies (bringing the country’s total to 230), and replace the voter’s register and issue new voter Solid achievements - the 2003 balance sheet identity cards. The voter registration will now begin on 16 March and end on 29 March. To ensure that the EC is able to comprehensively conduct the elections, Last year, the main objective of the Kufuor government was to the government released the equivalent of US$10m to the Commission last August, in addition to further committing itself to funding 60% of the total consolidate the remarkable achievements of the 2002 fiscal year. cost, estimated at $24m. Donor countries will fund the remaining 40%. This is how the macroeconomic front panned out in 2003. Golden Age of Business For business people, there could be no more business-friendly n the 2003 budget, the government set itself a real GDP growth of at GSE All-Share Index, the main gauge of performance on the GSE, rose by government than Kufuor’s. When he came into office in January 2001, least 4.7%; a reduction in the year-to-year rate of inflation from 15.2% 154% (or 142.7% in dollar terms), making it the best performing year to date he declared the next four years as the “Golden Age of Business”. He has at end-December 2002 to 9% by end-December 2003; an overall in the history of the GSE. It was also the best performing market in now gone further by declaring 2004 as the “Business Friendly Year”. Ibudget deficit of 3.1% of GDP; a domestic primary budget surplus the world. Market capitalisation went up by 104%, while turnover in both The government is convinced that growth will come only if the private of 3% of GDP; and rebuilding of gross official reserves equivalent to 2.3 volume and value terms increased by 118.3% and 335.4% respectively. sector is strengthened in a positive way to act as the engine of growth months of imports. and poverty reduction. Last year, the government therefore put in place National debt various measures to make the private sector feel more comfortable in the Most of these goals were attained, and even bettered: The total stock of domestic debt at the end of December 2003, exclusive country. For example, a Business Law Division of the Ministry of Justice n The GDP growth rate was higher than expected - 5.2% against a of revaluation stock, decreased by 298.2 billion cedis. The decline was due was established to embark upon the task of reforming all laws that impede projected 4.7% to the redemption of 218.9 billion of Tema Oil Refinery bonds held by the the setting-up and growth of businesses in the country. n Year-on-year inflation declined to 23.6% at end-December 2003, Ghana Commercial Bank, and net redemption of Treasury Bills by 520.1 The next elections will pitch the NPP (whose supporters are seen This year, the thrust of the policy initiatives announced in the 2004 after peaking at 30% at end-April 2003. billion cedis. The country’s total medium and long-term external debt stood here) with the main opposition party, NDC budget, has been fashioned to create a more conducive business friendly n The cedi remained relatively stable throughout the year at US$6.47 billion in December 2003, representing an increase of about environment that will accelerate the development of a more vibrant private — depreciating by only 4.7% against the US dollar 4% over the 2002 level. In 2004, the external debt stock is expected to How did they do it? In February 2001, then only two months in office, sector. n The overall budget deficit was contained at 3.4% of GDP against decrease by US$1.6 billion when the country reaches the HIPC Completion the president set out his priorities under the Ghana Poverty Reduction The government has further committed itself to providing specific the targeted 3.3% of GDP. Point and bilateral creditors provide debt cancellation. Strategy (GPRS), which defined the country’s medium-term economic support to the business community with special emphasis on Small and n Net borrowing by government represented the best objectives and policy agenda for 2003-2005. This requires that the country Medium-Scale Enterprises (SMEs). performance since 1995, registering a net repayment of 0.4% of HIPC funds concentrates its effort in five priority areas as focal points for economic In order to ease the tax burden on the corporate sector, and to reflect GDP, against the target of zero net borrowing In 2001, the government went HIPC (Highly Indebted Poor Country status) growth: These are: the business friendly dimension of this year’s budget, the government has n Gross foreign exchange reserves at the was “in view of the dire straits in which we found the economy that had been n Infrastructure development proposed a reduction in the corporate income tax rate from the current equivalent to 3.9 months of imports. This was the highest since bequeathed to us by our predecessors”, says finance minister, Yaw Osafo- n Modernisation of agriculture based on rural development 32.5% to 30% to take effect from next year. the liberalisation of the foreign exchange market in 1990 Maafo. “This bold decision was driven by our deep appreciation of the n Delivery of enhanced social services The government has further proposed that payment of VAT on n Interest rates assumed a downward trend, with the benchmark expected positive impact which we foresaw. Looking at the benefits that n Strengthening institutions of good governance imported industrial raw materials be deferred and thus zero-rated. It is 91-day Treasury Bill rate falling sharply from a peak of 35.3% in have so far come to our communities … we are proud of the overwhelming n Strengthening the private sector hoped that this will mitigate the upfront cash flow problems faced by June 2003 to 18.7% at the end of the year evidence on the ground which is a clear vindication of our decision in manufacturers associated with the VAT component of large imports of n Total tax revenues exceeded expectations in 2003 as a result of 2001 to go HIPC.” This has since become the Kufuor Bible, and every political and raw materials. measures taken to improve efficiency in tax administration Last year, the government expected a total inflow of 853 billion cedis economic activity undertaken by his government revolves around, or Again, in support of the private sector, the Venture Capital Fund which n Expenditures were kept within budget ceilings. of HIPC resources for poverty reduction and growth enhancing projects. flows from, the GPRS. was approved by parliament last year will be fully implemented this year. But by the end of the year, 850.8 billion cedis had been disbursed, out of Regarding infrastructure development, the achievements of the last An Insolvency Bill which is intended to review the current Bankruptcy Law Interest rates which 144 billion cedis was used for domestic debt repayment, a strategy three years have been hugely impressive. The government’s road building has also been presented to parliament. Interest rates generally declined in 2003. In line with macroeconomic that was designed to ease interest payments and thereby free government programme – which covers a wide gamut of feeder, trunk and urban Similarly, the Companies Code is being reviewed and will be submitted developments earlier in the year, the Monetary Policy Committee of the discretionary resources for the social sector. roads, major highways, bridges, etc, are all geared at facilitating intra- to parliament this year. The revision is intended to improve corporate Bank of Ghana raised the Bank’s prime rate to 27.5% in the first half of This year, the country expects to reach the HIPC Completion Point regional trade, opening up rural areas for investment and to give farmers governance and bring the rules and laws regulating businesses in Ghana the year. But, as a result of good economic performance that led to the (CP), when it would have attained the triggers for floating CP. At Completion an enhanced access to urban markets. in line with international best practices. abatement of inflationary pressures, the prime rate was reduced by 6 points Point, bilateral creditors, including the G8 countries, are expected to cancel Economic health is often predicated on national stability and security, In order to enable the Eximguaranty Company Limited to offer support to 21.5% at the end of 2003. about US$1.5 billion of Ghana’s external debt. Other commercial creditors something Ghana achieved under Rawlings and continues to consolidate and improve access to credit for small and medium scale enterprises, the On the money market, interest rates also fell sharply in the second half are also expected to give a comparable treatment. under Kufuor. With democratic rule now firmly entrenched, the country government has given a loan facility of 10 billion cedis to the Company to of the year. The commercial bank base rates, after initially lagging behind, Osafo-Maafo has assured donors that even in this election year, the has the luxury of concentrating on building the economy and improving provide guarantees to micro enterprises. dropped from 32% to 28.5% by the end of December. government “will continue to pursue the prudent economic policies that the lives of the people. In short, for any investor who wants peace of mind and maximum have enabled us attain our present healthy economic status. We will not This year, the fourth democratic elections since 1992 will be held on returns, there can be no better place than Kufuor’s Ghana. It is indeed a Stock Market allow any slippages in responsible economic management to derail us from 7 December. The government has stated its full commitment to the free delight (apologies to Peter Jazzy Ezeh). g The (GSE) performed remarkably well in2003.The our chartered course.” g

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Q: In the glorious days of old, Ghana was THE champion of African Centre, where Mr Taylor was expected to make a statement, that word came causes. These days Ghana is hardly mentioned at all, except when it in that a warrant had been issued for his arrest. I really felt betrayed by the comes to ECOWAS. What is happening? Will Ghana ever re-take its international community. Kufuor: “We are on course” rightful place on the African political radar? A: Ghana is coming back to centre stage in African affairs. For the past 30 Q: As chairman of ECOWAS, did you find the timing helpful? I think years or so, there was a lapse on the African scene because, as you know, David Crane, the American special prosecutor of the Sierra Leone In this interview, President John Agyekum Kufuor tells Baffour Ankomah about the economy collapsed and the fact that everybody knew our plight, we court, showed no respect for your efforts and that of the other the great strides his government is making on the economic front, how he sees feared that we would not be taken seriously. But I can assure you that presidents who had met in Accra. Ghana is gradually recovering ground. A: That is what I mean by betrayed, because one would expect that due pan-Africanism and African development, and how he felt “betrayed by the consultation, reparation and all that would be made before a decision of Q: Do you believe in Pan-Africanism? And what does it mean to such magnitude was announced. You don’t invite a president of another international community” on President Charles Taylor. you? country to your country only to arrest him. The consequences would have A: I don’t see Pan-Africanism as an ideology but I believe in humanism; I been vast and untold. believe that the African is part of the universal human creation and I believe can during this first term, so that by the end of my second term (if the in the dignity of man. So my idea of Pan-Africanism is enabling Africans Q: Did you protest? people give me one, which I trust they will), they would see the results for to improve themselves through sound education, improved social services A: I informed the United States of the embarrassment that the themselves. We are on course. and increasing awareness of the world of which they are part, so that they announcement caused. can effectively compete with the rest of the world. Q: Why is the flag and emblem of your party, the NPP, the same I am a Pan-Africanist, but, as I have said, I don’t see it as an ideology, Q: If I can bring you back home, what will be your priorities if you as the Republican Party of the USA? Are there any ideological and I see it as a natural evolution which entitles all of us to prepare ourselves win a second term? other links between the two parties? to take a dignified position in the community of races. A: Currently, we are working on our short-to-medium term priorities. In A: I think it’s just a coincidence because at the formation of the NPP in practical terms, we will need a second term to realise these priorities. 1992, we tried a whole series of colours and emblems, and I remember it Q: Is it true that at the Abuja Commonwealth Summit, Ghana We are trying to rebuild the country by tackling infrastructural was Dr Safo Adu, one of our party leaders, who suggested the elephant. supported the continued suspension of Zimbabwe? development, improving and modernising our roads, ports and harbours; The idea was not an imitation of the Republican Party. In Ghana, the A: It wasn’t put to a vote, so the issue of supporting it or not did not arise. and introducing computerisation. The Accra airport is being refurbished elephant from time immemorial has always had an important symbolic because we want to become the hub of Sub-Saharan Africa; another and proverbial role in all the traditional settings, especially in chieftaincy. Q: How do you see the African Union so far? Is there hope for true international airport is under consideration. So it was just a coincidence. African unity to give Africa a voice on the global stage? We are also trying to rebuild the rail system, which has entirely A: There is hope, because the Union is being driven by very realistic and collapsed, because since the British built it in the 1900s, there hasn’t been Q: At the People’s Assembly in January last year, you said, and feasible methods. In the independence era, when we talked about African any servicing or improvements, and it is therefore in a very deplorable I quote: “It is a matter of great concern and indeed a shame for unity, we talked more about politics and there was so much posturing that state. In addition, we are working on modernising agriculture, in terms of all Ghanaians that more than 60% of our budget comes from people felt it was not practical. storage, marketing and reducing costs. Vast improvements have already development partners.” You must have spent days thinking long Today, in the African Union, humanity is seen as central to everything been made in agriculture, and I think we need more than four years to and hard about this. So what was the motivation? What made you we are doing, it is obvious amongst the leaders and I believe people achieve all the targets set in this sector. tell the nation this truth? are beginning to realise that to support humanity is to make economic Another priority is enhancing social institutions such as education Q: Is a presidential term limit for a developing country like ours A: Well, I wasn’t condemning getting help from outside, no, after all we strides. and health delivery; we have just passed a law introducing the National necessary and progressive? are a developing nation and we need help. Yes, I told the people the truth, That’s why the AU set up NEPAD which extends beyond intra-African Health Insurance Scheme this year. We started last year with a pilot A: Four years is too short. Even in America where there are developed but I also think we will need aid for quite sometime to come, to develop relationships to all and sundry, including the developed and Arab countries. scheme covering people between 50 and 60 years. I believe the health institutions and enhanced awareness, people see the four-year term as our infrastructure and economy, so that we can stand on our own and It is basically a win-win agreement between Africa and its development insurance scheme will mature during our second term. Good governance quite short; so you can imagine for a young or developing country like compete in international arenas. partners, because it benefits the partners economically and also supports and decentralisation are two other priorities we have to tackle. There is so ours with a rather messy socio-economic system, a four-year term is not I wanted the people to be aware of the reality; that we need to work African development. much on the plate of this government. adequate. Ideally, it should be five years. hard and help our own very selves and not be resigned to our state of poverty. I wanted them to be aware that we needed to take our destiny Q: Last June, the UN Special Court in Sierra Leone expected your Q: In your maiden speech as president, you promised to treat Q: Looking at the current strengths of the political parties in the into our own hands. government to arrest the then Liberian president, Charles Taylor, Rawlings with all the respect befitting a former president. Is that country, you are likely to win a second term without much sweat. For instance, in the public sector, the efficient and careful management who was attending a meeting in Accra called by you as chairman of still the case? Reading the Ghanaian press, Rawlings comes out as Is that how you see it? of public property, and the execution of individual duties in the appropriate ECOWAS. Why didn’t you arrest him? being hounded from all sides. Does this intense focus on him help A: I believe if we keep the pace at which we’ve been growing, continue to business manner can yield benefits for all. A: Five African presidents were meeting in Accra to find ways of kick- your national security and reconciliation efforts? show sensitivity to the people, and continue doing the good work within In the private sector, I think that entrepreneurship in real terms is a starting the Liberian peace process, and Mr Taylor had been invited as A: Former President Rawlings is a free citizen and a fellow countryman. the priorities we’ve set ourselves, the people will elect us for another term calculated risk-taking, and if our entrepreneurs would do their finances president of Liberia. We were not even aware that a warrant had been He has served his country as best as he saw fit and knew how. I harbour to continue with the good work of improving the lives of our people. correctly and conduct feasibility studies before launching their businesses, issued for his arrest. Incidentally, the African leadership had taken the no ill will against him, and I think that is the key. As a government, we are as well as borrowing money with the aim of recovering and expanding initiative to try to convince Mr Taylor to resign and allow all the factions focussed on modernising our country and unleashing the potential that Q: Is eight years enough for you to finish your programme? investment, our dependence on outside help might reduce. And it will in Liberia to negotiate. lie silent in our people. We are on good terms with any one dedicated to A: I can’t say it will be enough, but I will try and put in as much as I increase our self-respect and self-confidence. It was when the presidents were leaving my office for the Conference this vision, without a doubt. g

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Apart from the fact that we need foreign exchange, we must also put Village Enterprise. our people to work.” Last but not the least, a PSI project must also have “What it actually means is that we set communities up as limited liability a multiplying effect on the economy, so that its influence would trigger companies where the villagers actually own big corporate entities. The development in other areas. difference though is that the management is outsourced to professionals. That settled, Kyerematen himself, when he became minister of trade, So that whilst the villagers remain the shareholders, the companies are PSI, a sure winner! industry and PSI last year, after his sojourn as Ghana’s ambassador in managed on their behalf by the best professionals that we can recruit.” Washington DC, launched a complimentary programme to augment the He continues: “You can’t believe that such a factory is sitting out there The most exciting industrial news in Ghana must surely be the President’s Special many virtues of the PSI. in a rural community, and has, within this short time, stimulated so much Initiatives designed to find new ways of mass producing non-traditional exports to “My vision was two-pronged,” he tells ‘New African‘. “First, to implement development in that place! To support the factory, we have about 50,000 a comprehensive export-led industrialisation drive focused primarily on acres under cassava cultivation. Remember my vision: industry stimulating help accelerate economic growth. Baffour Ankomah reports from Accra. agro-processing and other manufacturing activities that involve mass agricultural production. Before we started the factory, the farmers could mobilisation of rural communities and other vulnerable groups. not sell even the limited quantities of cassava they produced. Today, with “The reason why I am zeroing in on these elements is that agro- just one factory providing the market, cassava production in the area has Three years ago when it came into office, President Kufuor’s processing is fundamental to any mass industrialisation programme that tripled.” Alan Kyerematen, government discovered that Ghana’s economic growth had been stunted we can pursue in this country, because primarily we are still an agrarian Two more starch factories will come on stream this year, one in the the man leading since the 1970s because the country was not exporting significantly more, economy. I look at industrialisation providing a stimulus for agricultural Ashanti Region called Sika Starch Company and the other in the Eastern the PSI crusade which, in turn, was only because past governments had not put in place production, because every aspect of making an agricultural product Region called Eastern Starch Company. any strategic framework to enable the country to export more. reaches the consumer in a sustainable way involves some kind of industry. Interestingly, the government did not provide the seed money for all As Alan Kyerematen put it: “You cannot export more without a vision So industrialisation is critical.” this. “What we did,” says Kyerematen, “was to engineer the concept, provide that seeks to promote exports in an aggressive way. And there was no The second part of his vision came in the shape of a “domestic market- technical assistance for the business plan to be prepared as a commercially vision, no strategic interventions, no policy framework. oriented industrialisation programme” designed to produce goods to viable enterprise, helped mobilise the farmers and organised them into a “As a country, we had relied so much on donor assistance over the compete with imported products in the domestic market. The rationale is legal entity, and then helped them to raise a loan through the financial years, and we had not therefore been able to grow our economy beyond that, “If I use all the money I earn from exports to import more goods, I institutions. what we had been able to do with the inflows from donor funds. And that come to square one,” the minister explains. Last June, Kyerematen moved “This is what we call facilitation. How could 10,000 farmers enter into was very limiting. So we needed a new agenda for growth, and this new his vision from the realm of theory into action by launching what he this kind of commercial activity without government facilitation? We did agenda had to be predicated on mass industrialisation.” called the Industrial Reform and Accelerated Growth Programme as a the research and identified the machinery for them, which cost US$3m. At last, the missing vision was provided by President Kufuor. “We will complement to the PSI, in fact both running in tandem. And we helped to recruit the management team for them as well.” have to pursue new strategic pillars of growth to transform our economy,” he told his cabinet days after coming into office. And so the PSI was Industrial starch Textiles and Garment born. The first PSI project to roll out was the production of industrial starch from The same philosophy applies in the textiles and garment sector. The The magic formula was based on export products in which Ghana cassava. In terms of chemical properties, starch from cassava is the best. government empowered the people by first setting up a model garment had comparative advantage: industrial starch from cassava, textile and It is better than potato starch, corn starch and all the others. In addition, factory (called Gold Collections Ltd) to be replicated by all local garment, oil palm, salt, handicrafts, groundnut oil, cocoa processing, and cassava is cultivated by over 90% of Ghana’s farming population and it entrepreneurs wishing to move into the sector. sorghum. Although they would be called PSI projects, they are yet purely constitutes 22% of the country’s agricultural GDP. The market potential for textiles and garment in the US alone is $70 private sector enterprises which are being facilitated by the government, “Our strategy is to add value to such a crop,” says Kyerematen. billion a year. Honduras and Sri Lanka both export $2 billion a year each to but not owned or run by it. “Industrial starch is one of the most widely used industrial raw materials the US. “In our case,” says Kyerematen, “cocoa, gold, timber — all together “We did this mindful of the fact that the private sector spurs growth, and — it goes into pharmaceuticals, every tablet you swallow has starch in it; — give us $2 billion a year. So you can see that by moving into these new that running businesses should not be the core business of governments,” it goes into beverages, the paper industry, the textile industry, the petro- areas of growth, we can transform our economy just like that”, he says Kyerematen explains. As such, under PSI, the government restricts itself chemical industry, literally everything you can think of. flipping his thumb and index finger. to providing directions or “the guiding hand” for the private sector to enter “So we knew it was a winner. We knew it from looking at the Again, the government showed the way, and went even further by into new areas that the government thinks could accelerate growth. experience of Thailand alone; they have survived on starch for many setting up a Clothing Technology Training Centre to train sewing operators alled PSI for short, the ‘President’s Special Initiatives’ could make any “With the government showing the way,” says Kyerematen, “it also years. Denmark is also one of the leading producers of starch and if you on industrial machines, to be used by the garment factories. The Centre mouth water, especially when you hear it so eloquently described provides hands-on support to the private sector. So we are moving from look at their development experience, starch was to them what cocoa was trains 400 sewing operators a month. So far, over 5,000 operators have by none other than the minister in charge of the programme, the paradigm that says governments just create an enabling environment to us some years ago.” been trained. Two more such centres are to be opened this year in Kumasi CAlan Kyerematen, who also doubles as the minister of trade and by introducing policy and then leaves the private sector to respond to In all, 10 starch factories will be set up in Ghana over the next five and Takoradi. industry. the policy. What we are saying is that the government has to go beyond years to produce 100,000 tonnes of starch per annum. The first — the In addition, the government mounted a programme to identify local The PSI, in summary, is a programme in search of “new strategic pillars creating that enabling environment and provide direct support to the Ayensu Starch Company — set up in 2002 at Bawjiase in the Central Region, entrepreneurs interested in the industry, and over the past year, has been of growth” beyond the restrictive confines of Ghana’s traditional exports private sector.” has already started exporting its first products. training and equipping them with the necessary know-how to run their — cocoa, gold and timber. It provides new opportunities for the private The philosophy behind the programme is simple: Any PSI project must The ownership structure of this factory is the most interesting bit factories. sector to move, with government facilitation, into new areas that have the be (a) primarily export oriented; (b) involved with adding value to national of the whole project. “Remember that at the core of my philosophy is “Ghana is the first country where local entrepreneurs are being potential to radically transform the economy, by producing new exports resources before export; (c) must have a technology orientation; and (d) bringing rural communities into mainstream activity,” Kyerematen tells facilitated in this way to go into garment manufacturing big time, instead that could grow the economy in the same way as cocoa, timber and gold must provide an avenue for the creation of mass employment. Because, as ‘New African’. “This starch factory is owned by 10,000 farmers. We have of relying solely on foreign companies,” Kyerematen says, with a tinge have done over the last seven decades — going back into colonial days. Kyerematen put it: “We can achieve growth but it can be jobless growth. introduced a new model in the corporate world, we call it the Corporate of pride in his voice. “We have adopted a different approach because we

VIII � NEW AFRICAN March 2004 March 2004 NEW AFRICAN n IX Focus on Ghana A country on the march

know it is the only way we can succeed. But we still need foreign investors industry, it is there for the taking. In the whole of West Africa, it is only in the garment industry to open up the market for us, to put Ghana’s label Senegal and Ghana that have salt deposits. To me, salt is even better than West African single currency on the market, so that we can push our own entrepreneurs through that all the PSI projects.” pathway.” He continues: “The spin-off from salt is that it is the basis for any Ghana made remarkable progress regarding the planned second West This year, 100 garment factory units being constructed by the chemical industry, and no country in the world can develop without a African single currency in moving from the achievement of one convergence government in the Tema Free Zone enclave in the southeast of the chemical industry. So it is not just the salt that we are interested in, but as criterion in 2001 to achieving two additional criteria in 2003. country, will be handed over (on hire) to the entrepreneurs to start their an input into developing Ghana’s chemical industry. We are, therefore, Member countries have four criteria to achieve in readiness for the operations. taking this very seriously.” take-off of the monetary union in July 2005. Thus, Ghana now has one “The government is creating a PSI Garment Village near Tema, which Under PSI, the salt sector has only just started. Again, the same more criterion — a single-digit inflation —which it is determined to achieve we will lease out to these local entrepreneurs,” disclosed Kyerematen. principle of government facilitation applies. “And the response has been this year through the pursuit of sound macroeconomic policies. “We’ve built five Garment Villages already to be commissioned by the end incredible,” Kyerematen tells ‘New African’. The success of the European Union in embarking on its own single of February. We reckon that all the factories will be up and running by the The government has identified six operational zones, right from Elmina currency in 1999 has created a renewed strength for ECOWAS to push end of 2004. We are going to support these textile companies to locate to Cape Coast in the Central Region, through to the biggest resource base ahead the creation of a second currency zone in West Africa, alongside themselves across the whole country. So it will be national.” Already, 10 in the Ada Songon and Keta areas of the Volta Region. Thirty medium- the CFA Franc. garment companies, registered by the Ghana Free Zone Board, are about scale companies with production capacities between 50,000 and 100,000 In pursuit of this aim, the Authority of Heads of State and Government to relocate in the Tema enclave. metric tonnes of salt annually will be established, in addition to community- of The Gambia, Ghana, Guinea, Sierra Leone and Nigeria, at its meeting The government’s “facilitation” does not end there. It will also help with PSI projects will take some load off cocoa, the cash cow, in based artisanal production units with capacity of about 50,000 metric in Lomé in 1999, adopted the following set of primary convergence sourcing market orders, the fabric and a lot more besides. The government sustaining the economy tonnes. Basically, the deposits cut right across the coastal belt of the criteria: estimates that each factory will employ at least 300 workers, so “it’s good country from east to west. n A limit on budget deficit (excluding grants) of not more than news for the unemployed”, says Kyerematen. US market. Ghana has the same duty-free opportunities under the EU- After all is done, the government will help find markets outside 5% of GDP Already, ‘Gold Collections Ltd’, the first model garment factory set Cotonou Accord, and can also export to the European Union. But for now the country for all the PSI projects. “It is part of the active facilitation,” n A single-digit inflation up by the government, has started exporting its first products. Last the US market is the main attraction. Kyerematen points out. n Central Bank financing of budget deficit limited to 10% of December, it exported 100,000 pieces of shirts and trousers to the US, previous year’s tax revenue to take advantage of the AGOA system under which Ghana’s garment Oil Palm More to come n Gross official reserves of at least 3 months of imports. sector has a duty-free and quota-free facility. This year, the factory has Under PSI, oil palm is called ‘Red Gold‘. Again, oil palm is one of the most Also in the pipeline, under PSI, is cocoa processing designed to add already received an order for one million pieces of work-gear for the widely used industrial raw materials, used in the soap, food, cosmetics, oil value to Ghana’s premier beans before export. Cocoa production for the According to the provisional data on macroeconomic performance and and fats, and other industries. 2002-2003 crop season (October 2002 to September 2003) was 496,869 convergence, the overall performance of the five countries worsened in Districts’ programme The government has targeted 300,000 hectares of oil palm plantations tonnes, the highest level recorded since 1964. But because the government 2003 relative to 2002. The Gambia, Guinea, and Sierra Leone registered in the next few years, and is seriously encouraging the nursing of the right has committed itself to adding value to 40% of production before export, some slippage, compared to their 2002 performance. Nigeria, however, Running alongside PSI, is another winner — the Rural Enterprises seedlings for a major take-off this year. the volume of exported cocoa beans in 2003 grew by only 11.4%. On the maintained an achievement of 2 primary criteria from 2001 to 2003. Development Programme, under which the government (through Says Alan Kyerematen: “The key to the oil palm industry is getting the other hand, cocoa products recorded a 54% growth in value and 87.3% On 19 December 2003, the West African Monetary Zone decided that the Ministry of Trade, Industry and PSI) is assisting all the 110 right seedlings. That has been the problem in this country. Interestingly, growth in prices. Ghana would host the headquarters of the West African Central Bank districts of the country to each set up one flagship commercially Malaysia, one of the major oil palm producers of today, came to Ghana to And there is also groundnut oil. According to Kyerematen, Ghana when it is set up in 2005. viable enterprise targeted at using locally available resources in learn the business. Today Malaysia earns over US$12 billion a year from produces more groundnuts than even the acclaimed sector leader, The It is expected that the monetary union will reduce the cost of doing which the district has a comparative advantage. It is projected that oil palm alone. And what are we doing?” Gambia. “We produce over 500,000 tonnes of groundnuts per annum, business in the sub-region by eliminating the fees and commissions charged 30 such district enterprises will start operations this year. To the Kufuor government, oil palm is a winner. It has, therefore, almost three times as much as The Gambia, where groundnut is their main for currency conversions in intra-regional transactions and increase trade “So you can imagine how, within the next five years, the commissioned 12 nursery operators (both local and foreign) to produce export crop,” the minister revealed. “The Gambia does not do more than between the member countries. whole landscape of our districts will be completely transformed. the right plantable seedings for the industry. This year alone, two million 200,000 tonnes per annum. We are currently doing 500,000 tonnes, and There will also be a general stability of the exchange rate of the new This is really bringing development closer to the districts,” says seedlings will be produced for distribution to interested farmers. “Once we what do we do with our groundnuts? If we can do 500,000 tonnes without currency, compared to the existing weak individual currencies in the zone. Kyerematen. get the seedlings out in the next few months, we will then help the farmers active government facilitation, you can imagine the potential for growth This will allow businessmen and women to plan with relative certainty Here again, for each district enterprise, it will be a public- to go into plantation development. It is going to be a major exercise,” now that groundnut oil is coming under PSI.” international transactions and investment. private sector shareholding structure — 60% private shareholding Kyerematen reveals. There is also sorghum, which is targeted at the local brewery industry. (including institutional shareholders and individuals), 20% reserved According to Kyerematen: “We have a standing order with the breweries to Convergence criteria table (4 is the target) for the District Assemblies, and 20% for the communities. The Salt produce sorghum to feed their plants. In Nigeria, the breweries are now government is in the process of creating a community trust to hold If oil palm is ‘Red Gold’, salt is ‘White Gold’ to PSI aficionados. Ghana, using 100% sorghum in place of imported malt. So the market is huge.” 2000 2001 2002 2003 the 20% on behalf of the communities. according to the minister of trade and industry, has a production capacity And there is the handicrafts sector. Under PSI, handicrafts will move All the 110 districts have already selected their projects. The of 2.5 million metric tonnes of salt. “That is our resource base. That is what from being just a cultural activity to a mass production commercial venture. The Gambia 4 3 2 1 government is now preparing the feasibility studies for them, we can produce as a country, but we are only currently producing less It will still be artisanal based, but there will also be factory-lined production Ghana 0 1 0 3 before getting into the financing stage. than 200,000 tonnes.” as done in Asia. The government wants to see this sector becoming a major “Things are happening under our government, without fanfare” And the market is huge! Nigeria alone, according to the minister, can export earner, and not just a tourist activity. Guinea 1 2 1 0 says Kyerematen. “Quietly we are preparing the ground for a major, take over 1.5 million metric tonnes. Nigeria currently imports much of “This is the major thrust of a very focused, very pro-active and Nigeria 3 2 2 2 major, take-off. In five years time, our industrial landscape will have its salt from Brazil. “So we have a huge market just around the corner,” resource-oriented programme,” says Kyerematen. “It is probably one of the been completely and radically transformed.” n Kyerematen says, pointing in the direction of Nigeria. “If we can build our best examples of public-private sector partnership that you can get.” g Sierra Leone 1 2 3 1

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newly independent Ghana, under Nkrumah, had to give its primary school instance, kindergartens were not mandatory of the pre-school structure, children the self-confidence to grow up through the achievements of their but they are now. There is the Open College System, which is in the process ancestors in history and the social sciences. of being set-up. The aim of this system is to enable those from the non- That period was successful in proving wrong what historians, cultural formal system and dropouts from junior secondary school to progress into The challenges of education experts and anthropologists supported by the Ghanaian political leadership mainstream education. It will function as a continuing platform for adult in the 1960s thought was the arrogance of the English scholar and famous learners who want to go back and complete their education. Oxford historian, Hugh Trevor-Roper, in his infamous quote: “Perhaps in In fact, the World Bank has over the past 15 years supported non- In this article, Ivor Agyeman-Duah traces the challenges of education the future there will be some African history ...But, at present, there is formal . The President’s Committee on Education which none; there is only the history of Europeans in Africa. The rest is darkness... was responsible for investigating problems, reforms and consolidation of in Ghana and argues that if the first president, Kwame Nkrumah, did so well in and darkness is not a subject of history.” data, according to Minister Baah Wiredu, identified issues of hardware, Africanising the education curriculum, it behoves the Kufuor government Having proved that the African had history and evidence of buildings and infrastructure, and the quality of education, which was contribution to global civilisation apart from the famous Ancient Egyptian measured by the performance of the schools in national examinations. to work towards using technology to achieve economic goals. and Nubian civilisations, not much of the British - influenced curriculum Among others, the following measures are being seriously looked changed in primary, secondary and tertiary education in Ghana. But it at: (a) The World Bank has given the Government some funds under the was also becoming obvious that if education would be meaningful, if Education Set-up Project to train headteachers in the best management African-Americans out of poverty, underdevelopment and oppression) Ghana could aspire to an industrial economy and create a middle-income practices; and (b) under the Ghana Education Trust Fund, the government was showing colours in the educated class led by Dr. Martin Luther King Jr. economy, its educational policies should be relevant to those goals. is increasing lecture halls, hostels and new libraries. Decolonisation in Africa was spearheaded by the educated nationalists from Since the late 1960s, these have been agreeable to all politicians from Apart from this, money has been set aside for faculty development the colonies. Thus, it was right that revolutionary transformation of Ghana K.A. Busia’s Progress Party to the New Patriotic Party (NPP) government of and research. The Committee on Education discovered that, as at last and Africa had to do with education. But what kind of education? President J.A. Kufuor. Thousands of workshops supported by government year, there was no lecturer in Ghana under the age of 30; the average age Throughout the period of colonialism, the colonies enjoyed education and foreign international institutions, including the World Bank, was between 40 and 45. In all, 28 billion cedis was allocated last year to a modelled on the “mother countries” cultural mode. The African nationalists Commonwealth Secretariat and The British Council, have all attempted to succession plan that would bring in many young professional teachers. thus fought for independence using the educational tools given to them evaluate the educational structure and its curriculum, some of which have These are some of the challenges facing the country. Perhaps the most by the colonial masters — the readings of John Stuart Mills on Liberty and been on the drawing board for two decades. important of these challenges has to do with information communication other writers of the Enlightenment. Now an education bill is being revised in parliament to replace the technology (ICT). The Ministry of Communication is developing telecoms When the British thought it wise to establish university colleges, they Education Act of 1961 as part of the systems for all towns with secondary were rightly affiliated to the University of London for “proper” supervision. findings of the President’s Committee “An education bill is being revised in schools. Computer training centres to As Edward Said (may his soul rest in peace) argues in ‘Orientalism’, at the on Education. If Nkrumah focused on help especially primary and secondary height of the British Empire, over 60% of the world that were either colonies African studies, trying to re-invent the parliament to replace the Education Act schools are being established in virtually of Britain or associated with it in anyway had acquired certain mannerisms glory of the African personality as a first of 1961 as part of the findings of the all the major towns by the government, that had been assumed standard, like wearing of suits and ties. step of human dignity and progress, the NGOs and other international It was in the period immediately after independence in Ghana, by next phase under President Kufuor’s President’s Committee on Education.” development agencies. Primary school enrolment has gone up 1960, that a conscious effort was made by Kwame Nkrumah to Africanise government is how to transform that There are even people in Ghana the educational curriculum in the country. Contrary to the classification of dignity into scientific and economic progress. studying online with American institutions as there are government African ideas and cultures as atavistic by colonial rule, Nkrumah established The education structure in Ghana has at the apex the Ministry of agencies. The Ministry of Information is about to start training over 100 n 1954, two significant events took place in the United States and the Institute of African Studies at the to research into Education headed by the minister, Kwadwo Baah Wiredu. It also has a public affairs officers online through a programme with Bingham Young Britain that impacted on the de-colonisation of Ghana, especially its Africa from all angles. directorate and agencies. Under the directorate, there is what is called the University in Utah, USA. education curriculum. The United States’ Supreme Court had ruled in He also supported the transformation of the Asante Cultural Centre in Civil Service Law (or PNDC Law 327) with other structures to see to policy The multi-million-dollar Kofi Annan Centre for IT Excellence, opened I the famous ‘Brown vs. Board of Education‘ case that legally ended Kumasi into the Ghana National Cultural Centre in the 1960s, the first such implementation. It is a huge red-tape, with the Ghana Education Service recently by President Kufuor in Accra, to train Ghanaian and other West educational segregation in America. centre in sub-Sahara Africa to teach Ghanaians about their own cultures. being in charge of the first cycle ladder (made up of kindergarten of ages Africa professionals in all aspects of economic development, using the African-Americans in the United States and continental Africans were This later spread to the regions and districts of the country. Nkrumah also 4-5, the primary for ages 6-11, and the junior secondary school for ages internet and other technologies, is a huge achievement in this direction. undergoing an evolution of spiritual and political change at the time. The established the Ghana Institute of Journalism to train African journalists to 12-14) and second cycle institutions (made up of the senior secondary, ICT development in Ghana is one of the best in Africa and the Civil Rights Movement was gathering momentum and African students report on Africa from the African perspective and depart from Eurocentric the technical and vocational); while the National Council on Tertiary developing world. American journalists who accompanied the former US who had studied in the United States, including Kwame Nkrumah, Nzamdi images. Two other universities — The Kwame Nkrumah University of Science Education is in charge of the polytechnics, the universities, and other treasury secretary, Paul O’ Neil, to Ghana last year reported how Ghana has Azikiwe and Ako Agyei (the three studied at Lincoln University) had and Technology in Kumasi and the University of Cape Coast (which started tertiary institutions. emerged as the leader in the sub-region in ICT development. In fact one of returned to Africa to assume post-independent leadership. as the Kwame Nkrumah Ideological Institute) — and many teacher training In between the second and third institutions, there is the teacher the major US out-sourcing companies, ACS, is based in Accra and currently In Britain, empire rule was inevitably coming to an end and Westminster colleagues, vocational and technical institutes were also established by training colleges. This forms the basic structure of the conventional employs over 1,600 well-trained Ghanaian IT professionals. had accepted it. The struggle at both ends of the Atlantic was one for Nkrumah. educational set-up. With the growing ICT awareness and development, the government human dignity. It was also important because that period saw the greatest Soon the historical discourse in elementary schools had become not There are about 12,000 primary schools, 7,000 junior secondary recently inaugurated the board of the National Youth Commission which, solidarity among African-Americans and Africans for the first time since only the so-called European discoveries of Africa, led by Vasco da Gama schools, 480 senior secondary schools, 23 technical institutes, 38 teacher according to Baah Wiredu “will produce, mould, and nurture the youth slavery. In these two situations, education was the moving factor for the and David Livingstone, but how mighty empires and kingdoms like those training colleges, 10 polytechnics and 5 state universities even though the of Ghana to be very bold, literate, innovative, responsible, hard-working realisation of dreams. of the Asantes, Gas, Dagombas and the Denkyiras emerged, and Africa’s number of registered private universities is 20. and resourceful. Their participation in local government has been clearly W.E.B. Du Bois’s "talented tenth" (the critical leadership to take contribution to global civilisation. It was understandable at that time that a The challenges are many. Some policies are being fulfilled. For stated. We have also introduced a youth fund.” g

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since independence, having made over 63 visits to foreign countries. He the French government has committed a loan of 11 million euros for has visited many neighbouring countries that Ghana previously had serious the construction of six bridges and 230 km of feeder roads in the three political problems with because, as he said in his inaugural address in northern regions. The loan is a very soft one to be paid over 24 years with The philosopher and foreign policy January 2001, “we cannot hope to build a vibrant and prosperous Ghana 2% interest rate. unless we are at peace with our neighbours”. President Kufuor met the president of the World Bank at the Bank’s Nana Akufo Addo adds: “The Ghana-Togo border, which used to annual summit in Mali in 2001 and received a pledge of $340m for The Kufuor government has deep roots in liberal democratic thoughts. highlight the tension and mutual suspicion between the two countries to budgetary support. The provision of another $220m loan from the Bank the point where Ghana’s Armed Forces was at one point placed on third with an interest rate of less than 1%. Ivor Agyeman-Duah examines the man, Joseph Boakye Danquah, alert, is now accessible to Ghanaians 24 hours a day. Morocco is providing scholarship to Ghanaians to study fisheries and “Ghana-Burkina Faso and Ghana-Côte d’Ivoire relations are also tourism in Moroccan schools. who first laid the theoretical foundation in 1948 from which excellent as a result of the constant consultations between President Kufuor Germany, whose Chancellor Gerhard Schroeder visited Ghana this the Kufuor government takes inspiration. and his colleagues in the two countries. February (the first German chancellor to do so), has agreed to finance the “Ghana’s role as a strong advocate of peace has been enhanced and reconstruction of the 45 km Nsawam-Apedwa stretch of the Accra-Kumasi its position as the champion of democratic conduct in the spirit of NEPAD highway and also converted a debt of $6.75m owed to the former East oseph (Kwame Kyeretwie) Boakye Danquah (1895-1965) was the has been strongly stated. Our country is now seen as a Germany and many other debts running into millions “ancient” philosopher and lawyer who gave intellectual power to Nana Addo heaven of peace and a trustworthy and sincere neighbour, of dollars. liberalism in the pre-independent politics of the Gold Coast in the Danquah Akufo genuinely committed to peace and progress in the sub- One of the major highlights of President Kufuor’s J 1940s. A royal of Akyem Abuakwa in the Eastern Region, he did Addo: “We are region.” foreign visits has been the Indian government’s for the United Gold Coast Convention (UGCC), a conservative nationalist at peace with In his second term as chairman of the Economic commitment to set up the $2m Kofi Annan ICT Centre movement and off-shot of the ruling government, what Karl Marx did for our neighbours” Committee of West African States (ECOWAS), the regional of Excellence in Ghana for West Africa, which has since scientific socialism and theory. body of over 350 million people, President Kufuor has been commissioned and is operational with 12 Ghanaians Danquah shared a common history with Marx of never assuming played a critical role in the Liberia, Sierra Leone and trained in India manning the Centre. power. An astute philosopher, a PhD holder from the University of London, Ivorian crises and hosted many of the peace talks in Accra Ghana has also benefited from the historic Danquah was however no match for Kwame Nkrumah and his Convention whilst preaching to political leaders of the sub-region conversion by Japan of an $86m loan into a grant for People’s Party, which won a series of elections until Nkrumah led Ghana about the need for good governance and human rights the construction of portions of the Kasoa-Yamoransa to independence on 6 March 1957. observance. highway, and the Nihon University donating 350 But Danquah had many things against Marx. In 1948, Danquah told In February 2004, Ghana became the first country computers worth 5.8 million cedis to the Kwame Nkrumah a gathering of anti-colonial nationalists: “The [UGCC’s] policy is to liberate to voluntarily subject itself to NEPAD’s Peer Review University of Science and Technology in Kumasi. the energies of the people for the growth of a property owning democracy Mechanism which means that in the next six months, the J. B. Danquah J.B. Danquah’s political philosophy of “Ghanaism” in this land, with right to life, freedom and justice as the principle to government’s democratic, human rights and economic was also people-centered. He expressed forcefully that which the government and the laws of the land should be dedicated in objectives will be inspected by a team of African observers. complete donor reliance, relying on multi-national order specifically to enrich life, property and liberty of each and every Any adverse finding could lead to sanctions by NEPAD. financial institutions for monetary assistance, was dangerous for national citizen.” produce disfigured limbless and malformed societies for us in this pregnant By agreeing to be reviewed first, Ghana is leading by example and development. Speaking to policy makers and faculty at Columbia University in generation”. reassuring others who have signed”, said Louis Gnagbe, NEPAD spokesman Danquah also advocated for the development of human capital, the September 2003, President Kufuor specifically quoted this to illustrate And there lies the rub — the ideological battle that followers of Danquah who was speaking in Kigali, Rwanda, where 11 African heads of state mobilisation of human skills. This he based on an Akan proverb: “Mefra the beginnings of his government’s policy, and said: “This is the central had with Nkrumah and his socialist programmes, including state control deliberated on the peer-review mechanism in February. sika, sika mebe; nipa ne asem.” (I called money but money is mute. It is article of my party (now New Patriotic Party) which we used to contest of the economy. human beings that matter.) the December 2000 elections that brought us to power.” These battles influenced the direction of Ghana’s foreign policy since Foreign policy successes include: Based on this, Kufuor in his foreign travels always connects with the But President Kufuor, like Danquah, or even the current foreign the 1950s in many ways. When the Berlin Wall fell in 1989, Danquah’s n In Spain, the Government unblocked a $40m loan frozen since 1998 Ghanaian communities abroad (estimated to be 3 million) who, in 2003, minister, Nana Addo Danquah Akufo Addo (who is incidentally a direct followers were still in opposition but they felt vindicated that the global as a result of its dissatisfaction with disbursement of a $20m loan to contributed over $1.9 billion to the home economy by way of transnational descendant of Danquah and son of Ghana’s president, Edward Akufo order rested in the hands of liberal believers. the Rawlings government. remittances. (The $1.9bn is only the remittances that went through the Addo), have strong traditional royal upbringing, having been brought But Ghana’s foreign policy under President Kufuor does not rest on n $60m loan disbursed as follows: $10m - Cardiothoracic Centre; $10m banks and forex bureaux). up in palaces of Akan chiefs and trained to cherish traditional political only what Danquah had to say. Article 40 of the 1992 Constitution (under - maternity school of University of Development Studies; $10m- To mobilise the skills of the Ghanaian Diaspora, a Home-Coming institutions. Chapter 6, titled The Directive Principles of State Policy - International water project in Akwapim ridge; improve water supply in Koforidua, Secretariat has been established to co-ordinate all data of Ghanaians In fact, Danquah was one of the early African scholars to argue Relations) creates the framework for how successive governments should Nsawam, Nkawkaw, Swedru, Anum Boso and Asamankese. abroad with the intention of government tapping into their skills. The that Africa could not develop politically if African political systems were conduct their relationships with other governments and international n $90 million loan to the Agricultural Development Bank to finance Secretariat serves as the centre for all programmes and issues involving ignored. He argued for what he called “Ghanaism”’, which for Ghana and organisations, including the Africa Union, United Nations, Commonwealth an inland rice project for about 10,000 rice farmers cultivating over Ghanaians abroad. It was set up in 2002 after the government had invited Africa he said, “emphasises the worth of the individual, individual initiative and others. 4,500 acres in the Eastern, Central, Western, Ashanti and Brong-Ahafo over 500 professional Ghanaians abroad to come home and brainstorm and enterprise: it emphasises the freedom and definity of the individual and The details of this, however, lie in the formulation of policies. President regions. on development issues. not sordid materialism, regimentation and state ownership of property”. Kufuor, who at the age of 30, was already a deputy minister of foreign n Spain has committed itself to establishing a solar energy factory in If at the end of his term history is kinder to the foreign policy options Danquah was also the one who chose the name Ghana for the country affairs, has “economic diplomacy” as the mantra but it has more practical Ghana to produce solar panels for West Africa. of the Kufuor government, Danquah’s philosophical establishments in the (from Ancient Ghana). He abhorred Marxism, which he described in meaning than intellectual formulation. 1940s will be acknowledged as contributing to it. President Kufuor then the late 1950s as “a German-made thalidomide tranquiliser which may The president, in his fourth year in office, is the most travelled leader In France as part of Ghana’s solicitation for investment and aid, becomes Danquah’s Lenin by style, but completely out of belief. g

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But the freedom currently enjoyed by the media is not matched by is helping our infant democracy. The peace Ghana is enjoying in a West professional ethics and training. Critics say, and even journalists themselves Africa under turmoil is partly due to a liberal media.” admit, that low levels of education, lack of proper training and deliberate President Kufuor’s four-year mandate ends in December when The media in an election year politicisation have prevented the media from being professional. elections for the presidency and the 200-member parliament, (which the “The media are fanning democratic values but in their zeal to get Electoral Commission has announced would be increased to 230), will be there, they trample upon the very things they try to achieve, democratic held. In preparing for the elections, the NMC with the support of the British Ghana’s media are playing a very important role in democracy. culture,” says George Mac Badji, executive secretary of the National Media Council, Frederick Ebert Foundation of Germany and other media NGOs Commission (NMC) which settles disputes between the public and the have been planning seminars for election coverage as Badji believes that Though there are lapses, others think with time the media will media. According to Badji, in 2003, the NMC settled 38 cases brought “sensitivity to national interest is lacking as it is manifested in reportage”. overcome their deficiencies and mature. Ivor Agyeman-Duah assesses by aggrieved members of the public — 98% of the cases went against the The media themselves have just got out of a divisive storm of eligibility media “because they did not do basic cross-checking”. and disqualification of some members in the election of the president and the media scene in this critical election year in Ghana. Notwithstanding the general acceptance of lapses, Major Tandoh of executives of the Ghana Journalists Association (GJA), the biggest umbrella the National Communication Authority (NCA) thinks that “media pluralism group for journalists in the country. At the end, one of the country’s respected journalists — Ajoa Yeboah-Afari, who had just returned from a he media have become a vital and indispensable part of Ghana’s not be ignored.” Commonwealth contract as editor of ‘Currents’ in London, was elected; the evolving democracy. In 1990, there were just four state-owned The government responds differently, insisting that the media appear second woman in succession for the GJA. newspapers in addition to the 60-year old Ghana Broadcasting to be less critical today because “we have been more democratic and not Ms.Yeboah-Afari, who previously worked for the Graphic Corporation, T Corporation (with its radio and television divisions). Today, corrupt”. President Kufuor’s press secretary, Kwabena Agyei Agyepong, ‘BBC‘, ‘West Africa‘ magazine and wrote one of the most popular columns the country boasts 127 radio stations, 6 TV stations and more then 60 says: “The media have been vibrant under the Kufuor government and even in the annals of Ghanaian journalism (for ‘The Mirror’, owned by the newspapers, many of them with a circulation of below 15,000. put the government on its toes. They have generated several critical issues Graphic Corporation), is now the editor of ‘The Ghanaian Times’. Applications for licenses to operate radio and TV continues, according for public discussions. By and large, this is an era of media pluralism and And she is aware of the problems: “My immediate task as president to Major J.R.K. Tandoh (retired), director general of the National editors decide on what they want to publish.’’ of the GJA is working towards improving the quality of reportage by Communication Authority (NCA), the nation’s licensing and moderating The newspapers are largely ideological and have three shades — those organising training programmes for as many of our members as possible. frequency body. privately owned but are government and party friendly like ‘The Statesman’ Under the constitution, you can’t stop people from practising journalism The measure of media freedom especially with (founded by the minister of foreign affairs, Nana even if they are not qualified. the technology of people phoning-in into radio “Media pluralism is help- Akufo Addo, before he came into government) and “Other people feel that the quacks should not be allowed to join the programmes contrast sharply with the situation the ‘Accra Mail’ whose editors are members of the GJA. The problem, as I see it, is that even if they are not allowed to be GJA 12 years ago under the Rawlings PNDC military ing our infant democracy. ruling NPP. members, they will still be able to practise and call themselves journalists, government (before the 1992 elections), when The peace Ghana is enjoy- There are other anti-government newspapers and the public will not know who is trained and who is not.” people were afraid to even read certain anti- like ‘The Ghana Palaver’ which churns out, week In the 2000 election, the GJA provided a media platform for the government publications secretly distributed from ing in a West Africa under after week, controversial reports of alleged Electoral Commissioner to address the nation on the preparations for London. turmoil is partly due to a government corruption and nepotism. Other the elections two days before the polls. It was a great success. But the Says the 69-year-old President : editors and newspapers are Nkrumahists, like GJA wants to go beyond that in the 2004 elections. Ms.Yeboah-Afari is “Now there is freedom everywhere and people are liberal media.” ‘The Independent‘, ‘The Crusading Guide’, and proposing that the election results be displayed at The Ghana International not afraid to express their views and even insult ‘The Guide’ that espouse the ideology of Kwame Press Centre located near the State House in Accra, a property given to the the president. This is the price we have to pay for democracy, and it is a Nkrumah, Ghana’s first pan-Africanist leader, and the fragments of his old GJA by the current government. good price to pay.” Convention Peoples’ Party. Previously, the culture of using the media for political campaigns was This is reinforced by the Paris-based World Association of Newspapers There are also those trying to be mid-stream like ‘The Ghanaian limited because of government monopoly. With media pluralism, politicians which in 2002-2003 declared that notwithstanding suppression in many Chronicle’ (credited with some serious investigative reporting), ‘The need the money and not the channel for propaganda. parts of the world, “there are certain positive breakthroughs, like in Benin Dispatch’, and ‘The Network Herald’. Media pluralism has helped to reduce vote-rigging. In the 2000 and Ghana, probably the two countries on the African continent, together Many of these papers are owned by professional journalists with a elections, ‘JOY FM‘ in Accra, like many other radio stations, sent over 60 with South Africa, which have the highest level of press freedom”. small capital base and are 8 or 12 paged, with very limited editorial and correspondents to witness the voting. Acts of intimidation and attempted The main opposition National Democratic Congress (NDC) under administrative staff. This creates problems in terms of circulation and rigging were duly reported. whose previous incarnation, the Provisional National Defence Council revenue mobilisation as co-operative publishing or mergers have failed. Pluralism, however, creates a competitive spirit to the advantage (PNDC), some journalists suffered loss of jobs, detention and even That is why the state-owned Graphic Corporation which publishes of politicians who pay less for advertisements and enjoy more of news death, says the media are too friendly to Kufuor’s government and even four leading newspapers, including the 48-paged ‘Daily Graphic’ (over reporting. Because of this, the media expenditure for the ruling NPP in the contributed through “campaigns of vilification and lies” to help Kufuor two-thirds covered with advertisements) with an estimated circulation of 2004 elections, according to its secretary-general, Dan Botwe, will remain come to power. over 60,000, has no rival — in terms of circulation, revenue mobilisation, the same: 10-20% of total campaign expenditure. ‘The media” according According to , the NDC communication spokesman prestige, staff numbers and office premises. In fact, the Graphic to Botwe, “operate without fear because this government repealed the in parliament: “The NDC has problems with the state media for unfair Corporation is the richest newspaper publisher in the country. criminal libel law under which the previous government impeded media coverage and we will continue to protest until we have a level playing The other state-owned newspaper publisher, New Times Corporation, freedom.” ground. The forthcoming elections [December 2004] would be media publishes ‘The Ghanaian Times’ and ‘The Weekly Spectator’. It is the second It is clear that Ghana’s media have entered a new phase and will be a elections because the media would be a major decider, and this should largest newspaper group in the country in terms of equity. Ghana has a vibrant media scene vital component of the country for many years to come g

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Osafo-Maafo speaks: “We ready for a proper take-off in growth. that the private sector will move into farming because it is profitable so to go to the IMF/World Bank Q: Would you say the same about the national currency, the cedi. do. This is where some of us differ with the others. with our own programme, Only last September, the cedi stood at 15,500 to £1. Today it is 16,700 We discuss these matters with the IMF/World Bank. Of course, the IMF our own agenda” to £1. The cedi is still depreciating in value, and that is bad news. would always go in the direction of strengthening the private sector. And A: Well, the cedi is still depreciating against the pound, against the dollar, that also happens to be the basic policy of our government. Look at our against the euro, against all the other major currencies. But at what rate? manifesto. It is there! We made it clear to everybody, in our manifesto, that In the year 2000, from January to December, the cedi lost its value from ours was going to be a government that would give the necessary support 3,200 to US$1 to about 7,000 to $1 - almost 100% devaluation. This was to the private sector for it to lead the growth of this country. And that also in the last year of the Rawlings government, before we came into office happens to be how the IMF thinks. on 10 January 2001. Therefore, when we sit down with the IMF/World Bank, we go with Now, for the whole of 2003, against the pound, which is one of the our own programme and our own agenda. We compare notes, we don’t strongest currencies in the world at the moment, the cedi depreciated always agree, but we always come to a compromise. about 18.5%. Against the US dollar, it was 4.6% — and we normally measure our devaluation against the dollar. Even against the euro, the cedi lost just Q: So how much of what is happening is your own government’s about 17% last year. So on the whole, the cedi has done very well under discussed policy, and how much is directives from the IMF/World our government. It is also important to find out the level of our foreign Bank? There is a perception that your government is being pushed exchange reserves. Last year, we targeted 2.3 months of foreign exchange too much here and there by the IMF/World Bank. reserves of import cover. When we came into office in January 2001, we A: That is not true. People believe, for instance, that the government should met only three weeks import cover. Today, we have almost four months subsidise petroleum products. That is how the TUC thinks! But I don’t of import cover. believe in that. There is no country that can develop by taking taxes from nurses, teachers and from the TUC itself, and using them to subsidise those Q: Is that enough? owning cars. Not all Ghanaians can afford to buy their own cars. What the A: It is more than enough! In fact, on the average we need three months government should therefore do, and we are doing, is to make sure that import cover. Indeed, one of the primary criteria for the West African single mass transportation is available for those who cannot afford to buy their currency convergence is that member countries must have at least three own cars. months import cover. We now have about four months import cover. We We had a situation where we were spending about 60 billion cedis a are doing very well. month to subsidise petroleum products. Ghana is a total importer of crude oil. And it is not wise for us to use our scarce foreign exchange earnings to Q: Last June, the Ghana Trades Union Congress (TUC) expressed import crude oil as we do, we spend US$450m a year to import crude oil, Osafo-Maafo: ‘We are in control’ concern about your government’s apparent wholesale adoption and then subsidise it for users. That cannot be done any more! The IMF of World Bank conditionalities on trade. It said the World Bank’s does not support that, and we don’t support it either. So if we happen to interference in Ghana’s domestic affairs was inimical to the agree with the IMF/World Bank on this matter, so be it! development agenda of the country. Do you agree? Ghana is doing very well under President Kufuor’s government, A: Not only do I disagree, but it is also very clear that the TUC does not Q: But you do know that in Ghana any increases in the prices says finance minister Yaw Osafo-Maafo, and it is not true that the understand what it is talking about. About 85% of developing countries of petroleum products have a serious negative impact on prices have development programmes with the IMF and the World Bank. Now, generally, leading to more inflation. You said as much in parliament country is being run by the IMF/World Bank as people allege. when you have programmes with the IMF and/or the World Bank (it is only two days ago when reading the 2004 budget. The huge increase usually both), you discuss with them the management of your economy in fuel prices last year led to more difficulties which, as you said “We are in control,” he tells Baffour Ankomah, in this interview. and the targets you want to attain. You do so in the context of prudent in parliament, forced you to bring in a supplementary budget to economic management. There is no country which believes that inflation stem the tide. So, not subsidising petroleum products has its own or the rapid depreciation of the national currency is a good thing. If your problems. Q: Your government is now into its fourth year in office. Would his pocket constant, without reducing it. room is dirty and somebody asks you to sweep it, it is not an insult. You A: Yes, to some limited extent, and it should be so. you say the economy is better today than when you met it? If yes, We have, therefore, worked at the macro level to bring inflation down, should have done it yourself in the first place. what have you done right, and how does it reflect in the lives of to bring interest rates down, to bring government borrowing down. What At these meetings with the IMF/World Bank, we look at various Q: But the enforced inflation or artificial economic difficulties the people? has happened is that the government was the single biggest borrower economic parameters and we try to find out what would be the best means arising from the fuel price increase last year affected the ordinary A: I think the results are there for all to see. When we came to power, in within the domestic financial set-up, and therefore the banks were of bringing inflation and interest rates down, or allowing the private sector Ghanaian more than the man or woman who owns his/her own the beginning of 2001, inflation stood at 40.1%, the bank lending rate completely crowded out. And once you crowd out the banks, you are to have a hold on the economy. Some still believe that the government car because by virtue of the fact that they have more disposable was 55%; today inflation stands at 23.6% and the bank interest rates are crowding out the private sector. should be building factories. Our government does not believe in that. We income, they can still afford the increased prices come what may. hovering between 25% and 31%. That is a significant reduction. Last year, the government did not only set the target of zero borrowing believe that the government should be facilitating the building of factories A: That is not true. That is not true! So, what we must do is that the It is said that inflation is the enemy of the poor. Therefore, if you bring from the domestic market, we also ended up paying back part of the by the private sector. ordinary person must be provided with public transport that is reliable and inflation down, you are increasing the value of the money in the pockets domestic debt of about 0.4% of GDP, about 280 billion cedis. Therefore, Some believe that the government should be making state farms to subsidised. That I am prepared to do. We are working towards subsidising of the ordinary person — people sometimes forget about this. The best I will say with some confidence that many things have gone right with the generate employment. Our government does not believe in that. We believe public transport, and at the moment we have buses in Accra that are anybody can do to help any person is to keep the value of the money in economy. All the indicators are pointing in the right direction and we are that the government should make the business environment so friendly subsidised. This year, we shall put on the roads 250 more buses from

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China which will be subsidised. it is the application of the funds that will determine the final product. HIPC the tax base of the country. We are not satisfied with the tax base. Many We are also rehabilitating the railway system to enable commuters to resources should not be used solely for the social sector as the World Ghanaians are not in the tax net. That is a challenge for this government. travel more reliably and cheaply, say between Accra and Tema, and Accra Bank and the IMF would want us to do. We, in Ghana, insisted that HIPC and Nsawam. But we will not support subsidising petroleum products. We resources should partly be applied to sectors that would generate growth, Q: So what are you doing to broaden the tax base? In most of Africa, can select a petroleum product like kerosene and subsidise it because of that would generate employment, that would provide support for the the tax base is too narrow. Only salaried workers end up paying tax. the type of people who use it — mainly in the rural areas where the bulk of private sector. The other sectors, like market women who earn even more, pay no our people live. That’s what we are going to do. That’s what the IMF/World So, in this country we are even using HIPC resources to lend to macro- tax or very little. Bank think. That’s how our government also thinks. finance, to lend to small and medium-scale enterprises. We are learning A: We decided to put a lot of money into tax education, because it is from the mistakes of others. Other countries had used HIPC resources important for people to know that if you want good roads and good Q: So you say the perception that the country is being run by the solely for the social sector, I don’t believe in that. Because, you see, if you sanitation, you need to pay taxes. We are also considering the possibility IMF/World Bank is not true, and that you are not implementing are educating people and you keep educating them without providing jobs of giving tax amnesty to people, to create that environment in which we wholesale directives from the IMF/World Bank. for them, you are going to create a bigger problem at the end of the day. tell them: “Look, from today to the next six months you have tax amnesty. A: It is absolutely false. Our political philosophy is based on the creation of That is why you should link the two. And we are doing just that. After that, anybody caught not paying tax would face the full rigours of the an enabling environment for the private sector to lead economic growth. But the HIPC rules normally say that HIPC relief should go only to the law.” We have not done it yet, but we are moving in that direction. Politically, you can place us in the centre of the spectrum; we are not a social sector, poverty-related reduction. But we went and argued that we We are also considering all manner of electronic systems for mobilising leftist government. And our position and views as a centrist government should be allowed to use 20% of the HIPC resources to pay our domestic tax revenue. Today when imports arrive at the ports, the bill of laden happen to coincide on many occasions with the position and views of the Oil palm at Mankraso: HIPC resources are bringing feeder roads debt, so that interest rates would come down. If interest rates come down, number goes into an electronic system called Gcnet, therefore it is almost IMF/World Bank. to these communities who benefits? The private sector. HIPC resources should intervene in areas impossible to dodge taxes at the ports. But people are finding innovative Therefore, if I go to the IMF myself, I go with a programme of not that create employment. Therefore, afforestation and all these things have ways to under-value their imports, so we need a stronger database to subsidising petroleum products. That’s my position, and that’s also the country, I don’t see anything wrong with it. been brought on board. So we have handled it differently. reduce that level of tax evasion. We are in fact doing quite a lot to improve position of the government. That’s what the IMF/World Bank also want. It Last year, we benefited from HIPC resources to the tune of 750 billion the tax system, but I admit that we still have a large sector of the population is much more a meeting of minds. cedis, and each district of the country, 110 in all, had over one billion cedis Q: Last year when the president spoke at the People’s Assembly not in the tax net. But, you see, you must also intervene to protect the poor. We have, this for development. This year, we are expecting about 950 billion cedis of in Accra, he said something that went to the very heart of why Our even bigger challenge is what I call “the informal SME” [small and year, budgeted for about 80 billion cedis to subsidise water and electricity HIPC relief, and we are carrying out all sorts of development programmes Africa is not progressing. “It is a matter of great concern and indeed medium scale enterprises] operators, some of whom are very rich. We are for those who consume at the lower end — i.e., the poor. Therefore, what aimed at minimising poverty and germinating growth. a shame for all Ghanaians,” he said, “that more than 60% of the trying to introduce new ways of getting them into the tax system. we call “lifeline consumers” are going to be subsidised in the 2004 budget. For example, we are using HIPC resources for reforestation, we have to country’s budget comes from development partners.” You are And we have been subsidising them. But we are not going to subsidise restore our timber cover. We are using HIPC resources to build feeder roads quoted elsewhere at 40%. So which is which — 60% or 40%? Q: Going back to donor funding, in Britain they say “there is nothing across the board for everybody. That is the difference. We will provide to make it easier for our farmers to bring their produce to the marketing A: It varies from year to year, but what is significant is that a very large like a free lunch”. What, therefore, are our development partners subsidy in appropriate cases, but it is never going to be wholesale. centres. We are using HIPC resources to provide water in every village that proportion of our budget is donor-dependent and that is not good for self getting in return for funding 40% or 60% of our budget? Are they doesn’t have potable water. We are using HIPC resources to do Phase 3 and reliance. I think it is important for us to bring this factor home to people. just being generous? Q: During the years when Ghana was known as a “star pupil” of the 4 of our rural electrification programme. We are using HIPC resources to So, the question one may ask is what have we done, as a government, to A: Well, I wouldn’t say that. There is a certain level of consciousness in IMF/World, the Rawlings government resisted pressures to go HIPC improve water in most secondary schools, especially those in Cape Coast minimise this dependence on donor funds? these people to help Africa get out of certain levels of poverty. Some of (Highly Indebted Poor Country status). But you went HIPC as soon that have serious water problems. We couldn’t have done all this without In the year 2000, total tax revenue was 4.3 trillion cedis. The Rawlings the conditions they impose on us, in order to get the grants, are very as your government was inaugurated. Why did you rush it? the HIPC resources. government did not increase import duty or VAT. They remained the same. interesting. For example, they say “you must improve the maternal A: To start with, it is not true that the Rawlings government resisted I think we took the right decision to go HIPC, and Ghanaians who did On the contrary, they removed what they called “special taxes of imports”. mortality rate from 60% to 80%, you must provide free medical care pressures to go HIPC. Indeed, you don’t just go HIPC if you are not not initially believe that there were benefits to HIPC, now do! When we In 2001, when we came into office, we improved total tax revenue to for pregnant women, and you must improve girl-child education from prepared to discipline the management of your economy. Nobody was went HIPC, there was a general perception that, that was the beginning of 6.8 trillion cedis; and in 2002 to 8.5 trillion cedis. Last year, we improved 80% to 85%”. even going to accept the Rawlings government to go HIPC. the doom of Ghana; that we would never get credit from anywhere, our it further to 13.4 trillion cedis. Therefore, as you can see, we have gone up All of this tells a story, which is that there is a tinge of guilt for what What does it mean by going HIPC? It means people should forgive credit rating would go down forever. Today, it is interesting to note that about three times in revenue mobilisation — from 4.3 trillion to 13.4 trillion they did to us in the past. They realise that they contributed to our level of you your debts, to write them off, to provide relief for the debts that you Ghana invited Standard & Poors to do a credit rating, and the country, — and that is only on tax revenue. We are now putting so much emphasis poverty, and therefore they must provide certain inputs to improve that owe them. If you are not managing your economy properly, why should under our government, ended up with a B+. Therefore, the perception on non-tax revenue, and I think from all indications we will also make a level of poverty. It is very clear from what they call “triggers” which we anybody give you relief for monies you have legitimately borrowed? that HIPC was the beginning of Ghana’s doom was not only wrong but big breakthrough there. So we are trying to improve the revenue base as are to meet as we discuss with them, that they want to help improve the People would do you that favour if they see your capability to manage the also misconceived. a means of achieving national self-reliance. quality of life for the poorer segment of our society. economy. And, therefore, you have to apply and be qualified for HIPC. And then, don’t forget that if we become developed, we can also buy There are two countries in West Africa, I won’t name them, which Q: Last October when you spoke in London, you said “we went HIPC Q: That is very good news, but how do we get out completely from more from the West. If you begin by putting more people into wearing applied for HIPC and were turned down; they did not qualify. It is believed to obtain debt relief, and we are getting it”. Would you say you are this dangerous situation of heavy dependence on donor support? shoes, more people will buy shoes. So the question of markets is also part that they have enough resources not to go the way they are going, but getting it in the expected quantities? Do you think we would ever get out of it? of their strategy. They are helping us to develop and at the same time they are not managing their economies properly and so nobody will accept A: Yes, very much so. In fact, last year we even got slightly more than we A: But we are now reducing the dependence. From the data I have just helping to develop their own markets. them to go HIPC and get debt relief. had programmed for. And this year we expect to hit the target. given you, it is coming down. We will, however, never say no to any donor First of all, we were, and still are, committed to changing the direction money that comes in. Grants, we will always say yes. But we should be Q: But would they be happy if we develop our own shoe industry of the management of Ghana’s economy. And we decided to take advantage Q:So why has HIPC been a success here, but a failure elsewhere in increasing our own revenue mobilisation, such that if one day, as you have so that we don’t buy shoes from them? of HIPC because if there is a system that enables you to use payments that Africa and beyond? just said, donor funding diminishes or does not come in, we can still make A: Why not? That’s the way we should go. Our government has decided go out of your system in foreign exchange for the development of your A: Well, if you have the chance to access any funds, even as an individual, it. That’s how we are going about it. And, therefore, we must broaden that we are going to process a minimum 40% of our cocoa production.

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Last year, we doubled the capacity of our Cocoa Processing Company. A set performance targets for the donors in much the same way as they third cocoa factory will soon be on stream. And Cargill, the biggest cocoa set performance targets for us. Are they meeting their targets? processor in the West, is knocking on our doors. They want to come A: They are. For example, last year the donors were supposed to support in, because they see from the way we are going that we may end up our budget to the tune of US$281.5m. In the end, they gave us $286.5m processing the bulk of our cocoa here. So if they want Ghana’s premium — this was the first time ever in the history of this country where donor cocoa, they had better get into partnership with us. pledges marched with actuals. Therefore, the donors met their targets.

Q: But the more value added you put into your cocoa, the higher the Q: How is privatisation faring under your government? And why is taxes you pay exporting to the European Union, is that not true? the government doing away with state banks that are doing well, like A: Yes, that is correct. You pay more duty on processed cocoa than on the Ghana Commercial Bank (GCB), while at the same time trying to raw beans. acquire VALCO (the aluminium smelter) that is not doing well? A: Well, VALCO is still under discussion so I wouldn’t want to comment Q: In effect, they don’t want us to process our cocoa. They want us on it. But in the final analysis, even if the government acquires VALCO, to continue exporting the raw beans. it will certainly offload it to the private sector or bring on board a private A: Well, we must be competitive because they also have duties to impose. operator. The government will not like to be seen operating VALCO. That But what we are trying to do in the WTO discussions is to get the high EU is not how our government thinks. We are private sector oriented. We will tariffs removed, and it appears from all indications that the processing of bring in a private sector operator. But we are still discussing it so I wouldn’t certain primary products would be encouraged in the next round of the want to pre-empt it by discussing it here with you. WTO talks. Q: You said when reading the 2004 budget, that GCB shares will Q: Some people say that foreign aid is a controlling mechanism be floated on the Ghana Stock Exchange so that Ghanaians can buy used by the development partners against recipient countries such parts of their national bank. But, from experience, privatised state as Ghana. Do you agree? assets end up in foreign hands. Why are we not encouraging our A: Yes and no. As you said, there is nothing like a free lunch, but whoever own people to buy these enterprises? is taking the lunch must know the price for taking that lunch. I think A: We always advertise them in both the local and foreign papers, and we the problem that many African countries have is that they don’t prepare look for strategic investors no matter where they come from. But today we properly before going to the negotiating table. Some countries go to don’t even have much to privatise because most of the state assets were negotiate with the IMF/World Bank without their own lawyers. Some even privatised by the Rawlings government before we came into office. The go to negotiate on serious macro-economic parameters without a single last major privatisation under our government is GCB. person in their team understanding macro economics. But if you do that, as many countries do, you end up with a raw deal. I Q: And much of this went, or is going, into foreign hands. So in the think we must prepare ourselves, do our home work well, know what is in end our economy will be in foreign hands. for us and what we are going in for, and try to go with a formula that will, A: Look, 70% of the state assets was privatised by the Rawlings government on net resultant basis, benefit us. And I think Ghana is doing that. before we came in. And to be fair to them, not all of them went into foreign hands, some went into Ghanaian hands. Q: Since you came into office, has there been any occasion where you felt the government was being pushed this way or that, by the Q: But wouldn’t it have been better for more to have gone into development partners, using aid as leverage? Ghanaian hands? A: I have never heard any such thing. Neither the World Bank nor the IMF A: You privatise for what reasons? You privatise to introduce knowhow. has ever asked any such thing of me or Ghana during our discussions. You privatise to introduce the latest technology. You privatise even to improve management. There are so many factors involved. Let’s take Q: What about your bilateral donors, like Britain or the USA? Have the Golden Tulip hotel, it used to be run as Continental Hotel by the State they said: “If you don’t side with us on Iraq or Zimbabwe, you get Hotels Corporation. Today it is run by Golden Tulip, and what difference a reduction in aid”, or something like that? do you see? A big one! Last year, the total taxes paid by Golden Tulip to A: I co-ordinate bilateral and multilateral aid discussions of this country. the government were about 10 billion cedis - far more than any dividend And the Ministry of Finance in every country does the same thing. So far, we have obtained from our assets. there has been no occasion where we are told that we have to do something So you need good hotels, it went to foreign hands alright, and they for or against another country in order to obtain funds. But I am not sure; are providing a good service. It is promoting tourism, it is helping the I can’t say it with 100% confidence because in Ghana, the Ministry of economy. You want to sell to a Ghanaian so that instead of getting 15 billion Foreign Affairs also does some work at other levels, but at the Ministry of cedis in taxation, you end up with half a billion or even losses. That kind Finance we have never faced that kind of pressure from donors. of selling to a Ghanaian for selling sake is wrong! You must sell an item so that the total productivity of that item will benefit the economy and the Q: Last year, when you met Ghanaians in London, you said you had people of Ghana. That is how it should be. g

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