Where China is a delight and a dilemma

In Ghana another name for globalization is China. From the biscuits sold on High Street, to the textile in Mokola market, to the toys for kids sold in Melcom and Game in the newly built Accra Shopping Mall, the Chinese dominance or ‘takeover’ as some call it, is obvious.

A drive through the city of Accra would reveal to even a first time visitor how deeply the China phenomenon has percolated. 90 per cent (by the way that’s a conservative estimate) of the goods that smart young hawkers flag before you at traffic junctions and bus stops are Chinese; most of them bearing Chinese inscriptions alongside English.

The Ghanaian manufacturing sector has simply resigned to fate. Those who try to survive are faced with infrastructural challenges like epileptic power supply. It must be acknowledged that what Ghana has for the past 12 months lamented as ‘energy crisis’ is what Lagosians will praise as a major breakthrough.

To give electricity for two and sometimes three days uninterrupted and then take it for 12 hours and restore it again for the same length of time, will obviously pass for a significant success in Lagos.

Anybody who shuttles the two countries will readily tell you that power is more constant in Ghana than in Lagos , Abuja or any town or city in Nigeria.

Despite this comparative advantage which should serve as a great incentive for Ghana , manufacturing is still no where near what could be deemed acceptable.

Some say Ghanaians are consumerists by nature, others argue that the forces of globalization are too strong for a country of 22 million like Ghana to fight.

The latter school of thought stress that even the United States and Europe cannot wad off the onslaught of China. They say globalization has carved a new world order; one which China is the factory of the world.

Time magazine recently quoted a Swiss professor of international political economy as saying that "there is no risk if America, Europe and Japan stop producing T shirt or television sets." China, he means, has capacity to meet the world demand.

What should Ghana and indeed Africa do to check the possible elimination of its manufacturing sector?

During its 50th anniversary celebrations last March, Ghana had to depend on China to produce its national flags and other survenirs that were used for the occasion. Over 60 percent of the flags, t-shirts, faze caps, ribbons and other street decors used during the celebration were made in China.

It is easy to find kente fabrics in Accra today that are made in China and imported back into Ghana , its traditional home. Customers are unlikely to care – or know – whether the cloth they wear is made in China.

For them, it doesn’t make much difference.

Some local manufacturers who fear they are likely to be severely hurt by the emerging trend are calling for protectionism. Others simply say that is what free market is all about. A free market economy must truly be free enough to allow consumers enough options to choose which to buy and which not to, they say.

"Ghanaians love these Chinese products," says Akua Mensah, a shop keeper in East Legon, Accra . "They are cheap and nice. Put a biscuit produced in Ghana alongside one produced in China , and many buyers will go for the one from China ." Mensah’s shop stocks different kinds of Chinese products, mostly consumables.

Accra does not yet have a particular location called China town like you will get in New York and many cities in the United States. "It is raging. With the trend of events, it is not unlikely that one might crop up in future," says Yaw Kwabena, a businessman.

"It is better for us that we have such here and they are producing here and employing our people than we are here creating jobs for youths in Shangai and Beijing while our youths are roaming the streets jobless. If they produce here they will pay taxes to government and the right multiplier effect will hold," Yaw argues.

Odartey Owusu, another businessman does not agree with Yaw. "The Chinese export strategy is different from what is conventional. They export products and people. They always prefer to bring their people to work in their factories than employ locals."

In Ghana ’s banking sector, such domestication is already in place. The number of Nigerians that work in the four Nigerian banks currently operating in Ghana is less than 25 altogether. Yet the four banks on the whole have over a thousand workers in their employ.

It is tempting to turn to protectionism. For many years under Jerry Rawlings’ socialist and autocratic regime, Ghana tried operating a closed up system but it boomeranged. Many of its best brains fled thecountry for better life elsewhere.

With encouraging political and socio-economic climate,many of these elites now are coming home. Back home they look to an appreciably comfortable life even if not exactly what they would get in Europe and America. This desire explains the boom in Ghana ’s retailsector. Any attempt to close up the economy again might trigger similar reactions as those of the 1980s.

This is dilemma before the government. Keen toensure that local manufacturing firms survive enoughto keep the jobs for the nation’s teeming graduates, the government is careful and calculating.

BusinessDay... the voice of business - Ghana: Where China is a delight and a dilemma