National Economic Forum: Is there a need?

Nana Kow Hayward Yaidoo Opinion May - 13 - 2014 , 07:51

The Ghana Trades Union Congress has been speaking these days on a number of issues in the country. Recently, their leader even suggested that our country was a failed state. But, much as that was an overstatement and largely incorrect, it, however, generated serious concerns, especially coming from that quarter.

No wonder the Daily Graphic of April 26 had cause to issue an editorial on the Trades Unionist assertion, providing us with not only the classical and authoritative definitions of what a Failed State is, as well as the road to becoming one, but also important advice to avert such national disgrace.

On February 9, 2008, my article “Respite to the Poor and Unemployed” was given a full-page coverage in the Daily Graphic, (p.26). In that my article, I suggested to government, barely a month into office, the trappings that it must avoid or shirk for sometime, and the remedies it needed to take immediately, in order to save the country from the very difficulty that we are now grappling with.

Public sector pay increases

Public Servants, or Public Service providers, if I am correct, are those workers on government payrolls; they work in government Ministries, departments and agencies. Their tasks comprise mainly administrative, tutorial, intelligence (security), and secretarial work.

I understand that these government workers who constitute about two per cent of the national population are the ones who directly receive over 70 per cent of national tax income which is invariably earned largely from the private sector. Yet government workers are unsatisfied, demanding and obtaining regular pay increase without any basis for commensurate productivity.

Are we not heading back to those days when government woke up one day and announced drastic cut in staff, and redeployment of others because its pay roll was too fat to sustain? Though education is a fundamental requirement in national development, we must hasten slowly the rate at which new public universities and high schools are being constructed without perceivable real economic expansion.

Unless we expand our manufacturing and productive base, how would salaries and emoluments of the new thousands of lecturers, tutors, administrators etc, who will run the institutions be paid and sustained in the long run? What about money for equipment and infrastructure maintenance? What about jobs for the thousands of graduates the new institutions produce, on top of the already bursting graduates unemployed brigades? What is going to be the social upshot for the country? We must change course now to avoid wallowing deeper into the quagmire of increase wage demand pressures, cyclical inflation, growing unemployment, and rising crime, that could threaten national security and stability.

Funding District Assemblies (Das)

The Local Government Act, 1993 ACT462, section 10, outlines clearly the functions of the DAs. Apart from the exercise of deliberative, legislative and executive functions, it is responsible, inter alia, for the overall development of the district; promote and support productive activity and social development in the district, develop basic infrastructure, improve management of human settlement and the environment etc.

Yet, as I write, statutory quarterly remittance from District Assemblies Common Fund (DACF) for those developments has fallen far behind schedule. In fact, when they do come, many deprived districts end up receiving as little as below GH¢60,000.00, after source deductions.

In the face of this, it is untenable that instead billions of cedis (equivalent to millions of dollars) could be realised for organisations such as SADA, GYEEDA, and MASLOC, for example.

Couldn’t have government given, for instance GH¢2 million each to some selected district assemblies with a mandate to identify their own district’s productive comparative advantages, task them to prepare Business plans for viable processing factories or industries to be set; and then require their own professionals to manage them profitably? Could you imagine further how these processing industries would have generated more jobs in the packaging, sales, transport and advertising subsectors for their local business folks? I could further imagine how poor farmers, now with ready markets for their raw materials, would expand their farms to make more money, and make farming more attractive and, thus eventually relegate poverty from their communities; one could also imagine how more jobs in the rural areas would effectively reverse the alarming rural to urban population drift and their associated heinous crimes.

In fact, if government had taken those initiatives and had routed the funds through the DAs, I suppose it would have demonstrated true commitment to economic and political decentralisation, and indeed the Local government system. It is not late, however.

For now, many of our district assemblies are unable to raise enough revenue from within their districts, due largely to the absence of real productive businesses, such as factories, or industries to be levied. Much of the Internally Generated Revenues in many districts is made from poor head-pans and table-top market women and men, which is invariably regressive tax.

Support to graduate youths

If we should ensure economic expansion, lower unemployment and revenue flow stability in the medium to long-term goal for our country, then there must be a serious and rapid shift from our current revenue dependence on the degenerative extractive resources, and other services. These, such as the minerals and now petrol chemicals, are even in the hands of foreign capitalists.

We have time immemorial experienced the devastating effect on us when the world prices, which they control anyway, falls. So what happens if, suddenly, the minerals get depleted completely, as we have seen some gold mining companies packed off?

It is high time we focused attention of our unemployed graduate youth on Agriculture, Engineering, Food Science, and other creative sciences. They must be supported with grants or soft credits and challenged to set up their own production entities, and develop their creativity for made-in-Ghana goods to be consumed locally and, for export markets.

If this is done, I envisage a production boom that will lessen our dependency on imported goods, and stabilise our currency and economy. The demand is insatiable, and the market is there. Why are most of the African countries dependent on imports from outside the continent? We thus have comparative advantages in terms of distance, labour costs, and the available institutional frameworks such as ECOWAS, SADC, AU, etc., to be able to persuade them to prefer our products to non-African source products.

I wonder why the Ministry of Trade and Industries, in collaboration with Foreign Affairs for example, has not yet made that breakthrough. Anytime an American or European Head of state travels, he signs multimillion-dollar trade and investment deals for his country. So why can’t we?

Due to neglect and lack of opportunities in their chosen fields, most of our well-trained technocrats have become banking and administrative bureaucrats; areas not quite their preferred vocation. Now, every student wants to pursue Business and Administrative courses. This trend must be reversed.

Incentive for early retirement

A third viable suggestion to the government is to provide a special incentive package to encourage older and experienced workers on its payroll to seek early retirement from their largely bureaucratic jobs to set up their own businesses. In addition to their retirement pay packages with which they would start their new projects, the government must motivate volunteers with attractive interest-free grants, and with medium to long-term repayment terms.