‘Restructure economy around services sector’
Two economic analysts with the Institute of Chartered Economists of Ghana (ICEG) have urged government to consider restructuring the economy around services because Ghanaians have a natural flair for things in that sector.
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Messrs Daniel Anim-Prempeh and Gideon Amissah, Chief Executive Officer and Head of Research and Policy Analysis of ICEG respectively, said the structure of the economy needed to be changed without which things would remain viciously cyclical which could only be managed, massaged and patched without any lasting solution.
Speaking to the GRAPHIC BUSINESS in an interview, they said either naturally or by training, the Ghanaian was predisposed to the services sector and that the only requirement was a deliberate policy framework and state-facilitated capacity building in selected services to make them globally competitive.
That should, however, be done without ignoring the agriculture and manufacturing sectors, they said.
The economic analysts suggested that services such as legal, healthcare delivery, general consultancy in accounting, business advisory and financial services, tourism, journalism and media practice offered the opportunity to employ a larger number of people.
“Other countries have developed at the back of manufacturing. But we shouldn’t adopt what will not be suitable for us. From our colonial training to present day, the educational system seems to be skewed towards training people for services, rather than the sciences and we should add value to what we have and market it to the world,” Mr Amissah stated.
The services sector
The services sector is expected to constitute 54.1 per cent of the country’s total productivity by the end of 2015, followed by industry with 26.9 per cent and agriculture with 19 per cent. The services sector also grew by 5.6 per cent in 2014 and is expected to grow by 4.7 per cent by the end of the year.
The services sector in Ghana is made up of trade, repair of vehicles and household goods; hotels and restaurants; transport and storage; information and communication; financial intermediation; business and real estate; public administration, defence and social security; education; health and social work; and other community, social and personal services.
The sector has consistently recorded positive growth rates. This is an indication that the sector naturally lends itself to the country’s growth agenda and should be pursued further.
Currently, the country pays huge legal fees to firms abroad for consultancy services in international arbitrations and negotiations. Civil engineers and architects mostly render services locally with some ending up working in offices in other professional areas.
Retraining professionals/capacity building
However, the two economists, who have just been appointed to lead the ICEG, a professional body, said the country should invest in retraining professionals to grow to bigger entities which could take on the sub-region, ultimately the world.
This could earn the country the twin benefits of saving foreign currency which would have been paid to foreign consulting firms, but also rake in the badly needed foreign exchange.
To buttress their suggestion, Mr Anim-Prempeh cited the Mauritius which had invested in training of its human capital to acquire cutting-edge education from Harvard, Yale, Stanford, Oxford and other ivory league universities which offer to the country and its private sector, quality services comparative to what pertained in any developed economy.
“We have to invest in our people so that they can have that international competitive edge and compete globally. We should not lose touch with local training, but we should think global in our training,” he stated.
Ignore not agriculture and manufacturing
We should augment this with manufacturing and agriculture. However, when it comes to manufacturing, the economists suggested a focus on the smaller manufacturing activities.
This would involve placing micro enterprises in various communities known for growing particular crops in larger quantities to provide guaranteed market for farmers and check post-harvest losses. For example, a small processing plant to produce fruit juice at Ada area to cater for the water melons they produce.
“If we do this, we will be preventing the importation of similar products from other jurisdictions and reduce the pressure on our local currency. Secondly, we will be creating jobs. So we should think about these smaller micro processing facilities for all the food and crop growing areas,” the CEO of ICEG stated.
On the second level, Mr Anim-Prempeh said the government should look within the economy and identify winners of the economy. The winners are people who have started something that is doing well. “As a deliberate policy, we should support them until they can break beyond the bounds of the economy.”
The support should be with concessionary loans, incentives, a diplomatic push to enter foreign markets and monitored to prevent abuse, and added that it called for passionate and selfless leadership.
The government has done a similar thing in the pharmaceutical industry where it has provided interest-free financial support to companies to produce essential drugs. It is also supporting some poultry farmers to produce broilers, a project which is currently facing some challenges. — GB
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