Ghana’s PPP policies essential to kick-starting industrialization, says AfDB
Private Public Partnerships (PPP) between government and the private sector are essential to the commencement of large-scale industrialization in the country and the Continent at large, says the African Development Bank.
According to the AfDB, Ghana’s industrialization agenda is central to its development as building a productive industry is the most promising strategy for creating formal jobs at scale and promoting growth whose benefits are widely shared.
Government, through its One District One Factory (1D1F) policy initiative, has partnered with the private sector to build factories with the medium to long term goal of industrializing the economy.
Official data from government indicates that, it has with private sector support, completed 125 factories. In total, there are some 296 factories undergoing construction.
In its 2021 African Industrialization Index report, the AfDB asserts there is a growing consensus that African countries need more proactive industrial policies, to foster growth in the most promising industries.
Industrial policy has a chequered history on the African continent, and for many years African governments have been advised to limit their efforts to creating a level playing field for private investors.
“In recent years, however, a number of African countries – including Ghana, Ethiopia and Mauritius, among others – have begun to work in collaboration with the private sector to identify and support infant industries, based on ‘educated guesses’ about their growth potential.
“They are developing new policy instruments that enable them to make targeted investment in infrastructure and skills, help firms access capital, technology and export markets, and broker linkages between manufacturers, investors and customers.
“While these initiatives remain at an early stage, there is good reason to believe that interventions of this kind are essential for kickstarting Africa’s industrialization,” it said.
Adding that, the African Development Bank is strongly committed to supporting African countries to strengthen their industrial policies.
In the Sub-Saharan Africa region, manufacturing declined as a share of GDP from 13% in 2000 to 10% in 2017, while in North Africa the decline over the same period was from 28% to 20%.
Poor manufacturing performance has left Africa largely excluded from the development of global value chains. The Economic Commission for Africa (ECA) estimates Africa’s share in world manufacturing value at just 1.5% in 2010 – down from 1.9% in 1980.
Around 80% of African manufactures are consumed domestically or traded in intra-African markets. Most of Africa’s exports are unimproved commodities as Africa adds value to only 14% of its exports, compared to 27% for emerging Asian economies.
This, the AfDB said, is a missed opportunity for African countries to gain more benefit from natural resource wealth and leaves many of them vulnerable to fluctuations in global prices.
Meanwhile, Ghana, per the African Industrialization Index developed by the African Development Bank (AfDB), ranks as the 14th most industrially developed country on the Continent.
The country’s current ranking indicates an improvement in its 2010 ranking when it was the 19th most industrially developed country on the African Continent.
In the West Africa sub-region, Ghana ranks among the five most industrially developed countries with the country benefitting from large coastal economies and steady growth.
Alongside Ghana are Nigeria, Senegal, Ivory Coast and Benin which are the other four most industrially developed countries in the West Africa sub-region.
