FIXING THE FUNDAMENTALS

Ghana 2018 | INDUSTRY & MINING | INTERVIEW

TBY talks to Seth Twum-Akwaboah, CEO of Association Ghana Industries (AGI), on developing evidence-based policy advocacy, tweaking the macro-economy, and encouraging partnerships.

 Seth Twum-Akwaboah
BIOGRAPHY
Appointed CEO of AGI in 2011, Seth Twum-Akwaboah coordinates the activities of the 22 business sectors under AGI’s membership. He was previously the coordinator of IntEnt Programme, a Dutch government initiative to support migrant entrepreneurs in the Netherlands set up businesses in Ghana. Joining AGI as a business development consultant, he later rose to head the AGI Business Development and Services Division as the Director. He holds a bachelor of arts (hons) degree in economics, geography, and resource development as well as an MBA from the University of Ghana. He currently chairs the Policy Committee of the Made in Ghana Campaign Committee of Ghana.

How does AGI support the growth of industries in Ghana?

AGI was established in 1958 as the Manufacturers Association of Ghana with just 10 enterprises. It grew quickly and, by 1984, had changed its scope and expanded to other industries. Today, AGI covers 22 different sectors in the Ghanaian economy, but core manufacturing activities are still the main one. Apart from our head office in Accra, we have six other offices in Tema, Takoradi, Kumasi, Sunyani, Tamale, and Ho. The key service of the association is evidence-based policy advocacy. Through our policy communications department, we collate sector views and concerns to then incorporate the findings into our proposition papers for government and policy makers. We also have some standard services such as the AGI business barometer survey through which we assess the mood of 500 companies on the business environment each quarter.

How do you solve the situation of import dependency?

If you want to solve the problem of imports you first have to fix the macroeconomic environment, stabilize the exchange rate, and adjust inflation to allow long-term business survival. The issue of finance is a major challenge since we are borrowing at a high cost; however, the treasury bills have been going down, which means the government will borrow less and banks have more choice to lend to the private sector, lowering interest rates. Second, the government also needs to reduce the cost of doing business to gain competitiveness and prevent foreign products from taking over local market share. The third step is focusing on SMEs, which are the bulk of our economy, to improve production to supply the market. In this sense, we offer business development services and have a department that provides services and links for SMEs to financial institutions and do export promotion. Once we do all this, then the idea is that the private sector should lead the effort to produce the goods the country needs and then encourage people to purchase them.

What is your assessment of the One District, One Factory policy?

It is a brilliant initiative since it encourages industrialization at a district level to help solve the problem of unemployment and reduce urban migration. We believe every district has the potential to do something. AGI can play a key role in encouraging its members to take the lead and establish the actual factories in the way the government expects them to. Through the agencies that work under the district assemblies, the government can identify the type of opportunities in the districts and the ways it can support businesses that want to build factories. That includes access to electricity, land, raw materials, and management. Since the initiative is not exclusive to local investors, at AGI we support and encourage foreign partnerships with local companies. On the one hand, foreign investors bring new technologies, expertise, and access to longer term cheap finance. On the other, indigenous companies know the local conditions, have a local network, and achieve the objectives much faster, so it works either way.

How should regional trade be incentivized?

Regional trade is key and is currently too low. Although ECOWAS conditions are much easier to satisfy than Europe, on average about 12-13% of our trade is regional, which is too low. Part of the problem is the nature of traded items, as local markets already have traditional raw materials such as gold and minerals. The potential is definitely there, but ECOWAS still needs to improve. In 2016, we had the introduction of a common external tariff, which is gradually taking shape. Some barriers need to be taken away, so we signed protocols to that effect.