Interview: K Y Amoako
What steps are being taken to reduce Ghana’s reliance on foreign aid programmes?
K Y AMOAKO: Aid has played a significant role in the economic development of Ghana and many other African countries. However, the government’s Ghana Beyond Aid (GBA) strategy correctly asserts that aid will not be enough to achieve economic transformation. GBA seeks to move the economy away from reliance on the export of raw commodities towards manufacturing and high-value services that provide opportunities for employment and prosperity. The GBA vision also involves a shift towards values of patriotism, honesty, hard work and self-reliance. GBA does not involve outright rejection of aid, but rather reduction of dependence on it. Under GBA, Ghana aims to fund basic services such as health, education and sanitation from its own resources, while using aid to support the transformation agenda. To finance the GBA agenda Ghana would need to tap into both domestic and international sources of finance. If innovative policies aimed at increasing domestic savings from the current 21% to 40% of GDP were put forward, at least $26bn could be made available for development purposes. Revenue could also be increased significantly by strengthening governance on tax collection, plugging tax leakages and widening the tax net to cover the large informal sector. Tax revenue can also be increased by targeting previously neglected areas, such as property taxes, and by improving communication with taxpayers to motivate them to pay their taxes. In this regard, recent government initiatives to leverage technology to increase tax revenue are laudable. Examples of these initiatives include the paperless port system, the issuance of national ID cards, and the digitisation of land records and digital addresses for homes and businesses.
Even though remittances represent a lower share of GDP than in other African countries, they remain a vastly underutilised source of financing in Ghana. According to the World Bank, the amount of remittances flowing to Ghana in 2018 was about $3.8bn, or 6% of GDP. It comes from the many Ghanaians in the diaspora who run successful businesses, teach at universities or serve as international civil servants.
Which sectors do you expect to be most impacted by the African Continental Free Trade Agreement?
AMOAKO: Ghana stands to benefit greatly from the AfCFTA. The country is endowed with natural beauty that can drive tourism, and natural resources such as oil, gas and minerals that can attract investment. In addition, Ghana has abundant land, climate conditions conducive for agriculture, and easy access to the rest of West Africa by air, land and sea. Kotoka International Airport was renovated and extended in 2018, the country has one of the highest road densities in the region and the port infrastructure is among the strongest in the sub-region.
Ghana has already developed its exports in the region, with West Africa being our dominant market for plastics, aluminium manufacturing, cosmetics and pharmaceuticals. Three regional markets in particular – Mali, Burkina Faso and Togo – receive the largest share of Ghanaian exports across almost all products. Following good harvests due to the current government’s Planting for Food and Jobs initiative, Ghana is now a net exporter of maize, exporting to neighbouring countries such as Côte d’Ivoire, Burkina Faso and Togo. The AfCFTA offers an opportunity for the government to address the issue of low productivity in manufacturing and agriculture, as well as infrastructure challenges. Initiatives are required to improve the road network and port facilities, which will reduce the cost of doing business. There is also a need for improvement in the macroeconomic and business environments in order to attract foreign investment. As the host of the Secretariat of the AfCFTA, Ghana will play an important role in supporting the regional integration agenda, and establish itself as a major player in African affairs.
You have reached the limit of premium articles you can view for free.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.
If you have already purchased this Report or have a website subscription, please login to continue.