NPP must help create local business giants

Last week the World Bank released a report stating the NPP's plan to boost privatise enterprise is proceeding at a disappointing clip. It has long been the position of this paper that while the government is right to make the private-sector a top priority, the NPP has significant hurdles to clear when it comes to basic strategy.

The Kufuor administration has done business the greatest service by providing the fundamentals of macro-economic stability. But, beyond that what is being done? What are the paradigm consequences of a policy of poverty reduction as opposed to wealth creation?

Beyond the macro-economy, so far the government has focused much of its effort on microfinance. This is understandable for an economy dominated by small enterprise operators. While this paper applauds the attempt to lift so many out of the bonds of poverty, The Statesman must question how efficient these efforts have been.

Certainly micro-finance can help a small business survive, a corn mill operator sustain her business, perhaps even grow - but how much growth is really possible at this level? Especially when Ghana has failed to produce the kind of world class corporations that can make Ghana a stakeholder in globalisation?

It is in this field that The Statesman feels the NPP can better focus its efforts. While this paper has no problem with Stanbic's plan to take over the Agricultural Development Bank (in fact as we have long stated we believe the merger of African companies is a good thing so that they can better compete on an international stage), the question has to be asked, why must the South African firm be the shark, and our own ADB the minnow?

Why has the NPP failed to help create companies and assume ownership of 'blue chip’ companies, something which was very dear to the programme of Dr Busia.

One of the issues this paper thinks the NPP needs to address is organisational. Currently the Private Sector is a sub-ministry under the auspices of the Ministry of Trade and Industry. We believe those positions should be at the minimum switched - so that the importance of fostering the private entrepreneur is rated as highly as it must be. In the new economic order, knowledge-based services are becoming even more lucrative than manufacturing or farming, for example.

In addition, such a set-up would allow the government to better prioritise its focus between micro-finance and aid for larger corporations. Micro-finance is certainly a device needed to help improve the poorest people’s lives, but it also serves to entrench the informal sector, as many of the industries supported by micro-finance tend to exist in that grey area.

That means the money, while it helps the individual, may not be doing much to improve the nation. By that The Statesman means the money isn’t being spent in a way that adds to the skill base of the people, at least not the skill-bases that will be most critical if Ghana is to become a more established player on the world’s economic stage.

Such a plan also entrenches the World Bank goal of poverty-elevation as one of our own. As if by putting an extra dollar a day in Ghanaian people’s hands the nation is doing anything truly sustainable to help the poorest in the nation improve their lives.

The real way to accomplish that is through education, and training. And the best way to make sure Ghana’s brightest, poor and rich, train in the areas that will bring them the most return is by carefully ascertaining what the market will need.

And the best way to make sure those educated Ghanaians do not simply emigrate to fill that market abroad, is to make sure the nation is producing sizeable, competitive firms that can retain our best and brightest. After all if a chemical engineer can make ten-times the living outside of the country, why would they stay?

But, if the gap narrows? Then perhaps some of our people, as patriotic as the next, will elect to forego some material wealth in order to help the nation as a whole.

It doesn’t take a great wizard to predict knowledge based skills will only become more essential for any nation that hopes to grab a greater share of the global marketplace. These sorts of skills can only be acquired through training, the sort of training micro-finance businesses do not tend to provide.

By contrast, many major corporations have training programmes to strengthen their employee strengths in technological literacy. And, with many of the most high-tech industries (such as bio-technology) being extremely capital-intensive it is imperative that the NPP do a better job in assisting larger firms to become global players. Just as importantly the NPP should target industries the nation is not currently strong in but have no dominant regional player.

In this way Ghana could eventually be home to West Africa’s top firms in any number of important areas. One example where the government has shown this sort of initiative is in off-shore banking – where Ghana is ahead of rivals like Nigeria in the race to establish an industry that when properly regulated attracts investment from the world’s richest companies and people.

This industry will need a cadre of top-end accountants and financial experts. While some of the first wave may come from abroad, there is no reason why Ghanaian schools can’t produce the rest, especially as students eye the very real possibility of landing a top-job within their own shores. In addition, a Ghanaian firm is likely to be more willing to train within the nation than a foreign firm would be.

The current NPP government is certainly the best friend private enterprise has ever had in this nation, but as we close in on a new leader for the party, and perhaps eventually for the country The Statesman calls on the government to make reassessing how to best help the sector a top priority.

The Statesman : : NPP must help create local business giants