Business

Ghana’s industrial drive – a focus on the 1D1F programme


In 2010, the share of manufacturing was at a woeful 6.7 per cent. The country imported GH₵12.5 billion worth of items and exported more than GH₵16 billion worth in 2016. 

Majority of the export, however, were all raw products.

Ghana’s industrialization has gone through three phases: the state-led import substitution industrialization which lasted from 1960 to 1983. It emphasized public investment and protection of infant industries. 

The second phase was under the structural adjustment programmes of the international financial institutions from 1984 to 2000. 

Since 2000 the government has concentrated on private sector development, reforms of the investment climate and adapting to the emerging natural resources boom.

Fast-tracking to today, we are at Ekumfi where president Akufo-Addo launched the first one district factory as part of an industrialization drive for the nation.

The $7 million project is a loan from the Ghana Exim Bank.

The government of Ghana lead the company to China where the company contracted the loan on their own under the 1D1F programme.  

It’s been exactly a year since the launch and the frame of the company has come up.

By the first quarter of 2019, the company is expected to be ready churning out pineapple juice at the farm’s pineapple several hectors have been grown in preparation for the factory.

Farmers are being paid GH₵200 every month even though their products are not ready

The Ekumfi Fruit and Juice Factory will also have 1000 young people of the Nation Builders Corps employed.

In this project, it is clear that the private sector is leading this government promise.

Information JoyBusiness gathers is that the GH₵7 million contracted from the Ghana Exim Bank is not guaranteed by the government.

All items purchased including the construction and fixtures will be the ones sold, should the company fail to pay back the loan.

The one district one factory follows after the third phase of Ghana’s industrialization process.

The one district one factory policy like the Import substitution era during the early 1960’s just look at which imports we do and how the industries can stop them. 

The 1D1F focus on industrialization was mainly to create jobs at the district level and use raw materials in those places.

But this is not what exactly the deputy minister for trade Robert Ahomka Lindsay is talking about here.

Leefound foods cut the sword for a tomato paste factory, but the raw materials will not be sourced locally at least not for now

Mr Ahomka Lindsay said, “Leefound foods is here to produce tomato paste, farmers will be prepared later to supply to the factory their fresh tomatoes but until then they will be importing”

The factory, however, will employ over 100 people by close of the year.

There have been several calls to properly focus the industrialization drive so that there are no duplications.

A typical example is the collapse of the Ayensu starch factory where poor farmers are owed several thousands of cedis because of the inactive company.

Just when the factory collapsed another company was launched in the Brong Ahafo region which will also be churning out the starch.

It’s against this backdrop that some companies are to receive stimulus packages to keep them in existence.
By April this year, 20 companies were shortlisted for a GH₵141 million injection but that is yet to hit the accounts of the benefiting companies.

The companies are expected to pay back at a lower interest rate compared to the prevailing market price.

Governments in time past and the current one have come up with several institutions to promote industrialization and provide technical support for businesses. The NBSSI, for example, goes around various companies to provide technical support.

The rural enterprise programme, 1D1F, the stimulus package, GIPC’s one district one exportable product, industrial park, private sector development, youth enterprises support, SME unit at the trade ministry factories inspectorate directorates and the NDPC are some of the government agencies tasked to increase Ghana’s fortunes when it comes to industrialization.

The effects are yet to kick in and show in employment figures and general development.

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