NDC's proposal for agro-processing zones: Pathway to industrialisation, economic revival?

Kester Aburam Korankye Politics Sep - 10 - 2024 , 03:57

The National Democratic Congress (NDC) has proposed establishing agro-processing zones in all 16 regions of the country as part of its industrial policy if voted back into government.

This initiative aims to give each region a comparative advantage in manufacturing and in value addition to their produce. The proposal has the potential to drive industrialisation, economic revival and regional development, but its success depends on addressing several challenges.

For many Ghanaian voters, especially the youth, promises are not enough. Clearly defined strategies to address challenges and attain desired outcomes are what matters to them.

Changing the narrative

Ghana's economy has been largely dependent on primary commodities, with little value addition. The NDC's proposal seeks to change this narrative by promoting industrialisation and economic revival as it seeks to partner with the private sector to establish these industrial zones.

With a clearly defined plan for execution, the government can address constraints such as raw material availability, access to credit and high utility tariffs which are likely to be hindrances.

The proposal's focus on regional development and comparative advantage is commendable because each of the country’s 16 regions has some distinct resources and each has farmers producing crops that could feed the industries that would be set up.

The identification of each region's strengths in agriculture and agro-processing could help create industrial zones that leverage local resources, reducing transportation costs and increasing efficiency. This approach can also promote regional balance and reduce the over-reliance on a few regions.

Value addition

The agricultural sector is a critical component of the economy, employing a significant portion of the population. The proposal's focus on staple crops such as oil palm, cashew, cotton, groundnuts, cocoa, soya, cassava, and shea nuts can help modernise the sector and increase productivity.

If we add value to these crops, the country can increase its export earnings and reduce dependence on imported goods.

The proposal has the potential to even create more jobs and employment opportunities in the industrial and agricultural sectors.

The focus must be on attracting foreign investments and promoting entrepreneurship, which will lead to job creation and economic growth.

The success of the proposal depends on the availability of adequate infrastructure, including roads, water, power and storage facilities.

The government must invest in infrastructure development to support the industrial zones and ensure their viability.

The proposal's emphasis on private sector participation is crucial for its success as we have often concluded that the government is bad at managing profitable businesses.

The private sector-led initiatives, on the other hand, have proven to be successful, therefore the government can leverage expertise, technology and funding from the private sector to establish and operate the industrial zones without much political interference.

The NDC's proposal is ambitious and has the potential to drive industrialisation and economic growth. However, a critical question remains unanswered: How does the government intend to fund this initiative?

The establishment of industrial zones, infrastructure development and private-sector partnerships require significant investment.

Will the government rely on public funding, private sector investment or a combination of both? What mechanisms will be put in place to ensure transparency and accountability in the use of funds?

How will the government balance the need for investment in this initiative with other competing priorities in the national budget? Clarifying the funding strategy is essential to understand the feasibility and sustainability of this proposal.

Addressing the challenges

While the proposal has potential, several challenges need to be addressed.

1. High cost of power: The suggestion to explore nuclear power by the Association of Ghana Industries (AGI) as a sustainable and cheaper alternative is worth considering.

2. Macroeconomic environment: Improving macroeconomic indicators such as inflation and interest rates, is crucial for industrial growth and that will largely depend on the management of the economy. Sound management of the economy is crucial for the success of this proposed intervention.

3. Tax exemption regime: Reviewing the tax exemption regime to address frustrations and ensure fairness is necessary.

4. Land acquisition: The government must ensure that land acquisition for the industrial zones is done fairly and transparently without displacing local communities.

5. Technology transfer: The government must ensure that the private sector partners transfer technology and expertise to local entrepreneurs and workers.

6. Local content: The government must promote local content and ensure that the industrial zones use local materials and services.

While the NDC's proposal has the potential to drive industrialisation, economic revival and regional development, addressing the challenges and recommendations outlined above is crucial for its success.

If implemented effectively, this initiative can be a game-changer for Ghana's economy and agricultural sector.