President Akufo-Addo’s plan to create jobs and improve the rural economy.
Driven into office by millions of Ghanaians, Akufo-Addo rode a wave of optimism promising to make the Black Star the most friendly African investment destination while strengthening the private sector. Coming into office is always a moment of huge opportunity, especially for a country like Ghana, who yearns for a rebirth and rejuvenation. “Our most important step is to make sure that this wealth touches the individual lives of our citizens,” affirms the Minister of Energy Boakye Agyarko. “Our citizens must feel that the wealth has been beneficial to them.” It is with this sentiment that Akufo-Addo’s administration has outlined the ‘One District, One Factory’ plan to add a glimmer of shine to the Black Star.
Launched as a project aimed at creating jobs for the youth and eventually reducing the developmental gaps and the rural-urban migration, ‘One District, One Factory’ will be a collaboration between the public and private sectors run through a specifically set-up organisation without acting as a direct investor in the industrial projects. “I think when you look at Ghana as a whole, the potential for value addition is one which emphasizes the participation of the private sector,” states Ghanaian Vice President Mahamudu Bawumia. “By encouraging the private sector, we can have at least one factory in all 216 districts and that will help the industrialisation drive for Ghana.” The goals of the ‘One District’ organisation are three-fold: reduce inherent risks in district level industrialisation through technical assistance, reduce the cost of doing business by providing shared industry resources and revenues and lastly, provide market linkages and access while generating demand for the locally-made products.
With the private sector providing the investments for the ODOF project, it’s evident that Akufo-Addo’s team believes the strengthening of the private sector will fundamentally solve the majority of economic matters. With local governments able to partner with the private sector if deemed prudent and advantageous, sharing of resources will provide a capacity building platform for both investors and other stakeholders across the value chains on the strengths and weaknesses of each district. The project also ensures relevant insurance cover for investors to ameliorate their business risks and make them more attractive to financial service providers. According to the Minister of Finance Hon. Ken Ofori-Atta, “we are laying strong foundations for private sector participation because when we’re running a deficit with low personal savings and corporate profits, an inviting environment to attract foreign investment is paramount to create. We are building to be the most business-friendly environment on the continent.”
Recently, the initiative received a major boost in the form of US$2 billion from the Chinese government’s private sector development corporation. Under the agreement, the China National Building Materials and Equipment Import and Export Corporation (CNBM), will provide up to 85% financing for viable projects recommended by the ‘One District, One Factory’ secretariat and accepted by the banks. Ghana Commercial Bank, Access Bank, Universal Merchant Bank and the Ghana Import and Export Bank, have so far signed up to the compact, although other banks have the opportunity to join. An incredible part of this agreement is that the CNBM will construct the factories for beneficiary companies and equip the factories with the essential equipment on a turnkey basis, to make them fully operational for the programme. With this financing, the Chinese will provide a huge market access for export commodities, which is expected to bring billions in revenue to Ghana annually. For Minister of Finance Ofori-Atta, “Ghana represents a pillar of stability in the region and it is our job to let the black star shine again and attract the needed investment to create a private sector and region that is both productive and profitable.”
The ‘One District, One Factory’ programme will also provide additional government contribution to each project in the form of infrastructural support, extension of energy, tax incentives, subsidies and facilitating access to credit for investors. Based on certain projections, the district industrialisation project forecasts to provide about 6,000 direct jobs per district. President Akufo-Addo promised the establishment of this programme as a sustainable means to open up the rural economy through massive rural industrialisation and to create the much-needed jobs for the youth. “His government is better ensured to empower the private sector, not by mouth but by action,” states Dr. Aaron Issa Anafure, CEO of SIC Life. “The government is the largest employer and Ghanaians are anxious for change and this desire brought Akufo-Addo into office and it drives his administration to bring the country back to progress and prosperity.” Though it will take time, all indications show that the ‘One District, One Factory’ project has the right goals and attitude to help the Black Star shine bright once again.