Building bridges between the public and private sector

Popularly known as “Agbada,” Bawumia is the sixth Ghanaian to occupy the high office since 1992. The former professor and economist, now the second-in-command in Ghana, sat down with Penresa to detail his background and his plans to make the Black Star shine bright again.

Could you give a summary of your background?

I began in academia where I was an assistant professor, teaching economics in the US and then came down to work at the Central Bank as an economist in the research department. I left the Central Bank to enter politics but it didn’t work out so I returned to academia in 2008. I took a position at Oxford University, wrote a book and was a scholar at the Centre for the Study of African Economies. I returned to politics again to run in the 2012 election and again for the 2016 election, which finally worked out. As vice president, I chair the economic management team for Ghana and work very closely with my other colleagues.

Do you personally feel any similarities to Kwame Nkrumah?

Kwame Nkrumah, Ghana’s first president, occupies a very special place in our hearts and in the history of Ghana. His vision was clear on what he wanted for Ghana and Africa, in terms of the industrialisation policies plus he had an immaculate sense for state intervention. Today, we are trying to win independence again – not political but economic independence. I think Akufo-Addo’s vision for Ghana is to have industrialisation cooperating more with the private sector.

Ghana has been blessed by President Kufuor’s leadership. It came at a very important time for Ghana, in 2001, when he took office. The country was literally bankrupt and he led an economic transformation. I was actually very lucky to be part of that team that he put together. At the time, I was at the Central Bank and I worked with an awesome team that was able to make some major strides. President Akufo-Addo is building on Kuffour’s successes and moving the country on a forward path.

It is a similar situation between then and now. Positives and optimism. How do you see this impacting the short and medium-term development of Ghana and its ability to attract FDI?

In attracting private investments, there is a lot of interest because people see that we’re a serious government committed to fiscal discipline and macroeconomic stability. I think the first thing that we’re trying to do is attract private sector investment, both local and foreign, because private sector doesn’t mean only foreign. We must ensure we attract the private sector so that the burden of taxation is reduced on companies. Philosophically, we believe that we have to move from a focus on taxation to a focus on production. Thus far, we’ve abolished about 15 taxes so that we can reduce the burden on businesses.

We are also introducing a lot of efficiency measures at the port. We are going completely electronic in port clearance and paperless at the port. Even domestic customs barriers within the country will be abolished. They’re all just inhibiting trade movement of goods. Once you move from the customs border, there is no need to meet other internal borders over again so we want to take all of those things out.

In the energy sector, we want to ensure a reliable energy supply and private sector investment. VRA was set up as a hydro company and now they are one of the best in the world for hydro. We should let the private sector take care of the thermal side because we need much more private sector participation in the energy sector. We hope to see better investments along generation, distribution and transmission of energy. We’re making a major move to sort out the debts of the energy sector because ultimately, it’s been a financial problem. We have implemented a major bond issue to deal with the energy sector collateralised on some of the levies that we’ve imposed. It will be very important to free up the balance sheets of some of these companies so that we can make sure it doesn’t happen again.

Can you tell us a little bit about the “One District, One Factory” policy?

As a country, our focus is to move away from a reliance on raw materials, while trying to add real value to our raw materials. Looking at the value chain, if you only export raw materials you don’t get much money. Look at the cocoa farmer, if you take a US$1 bar of chocolate the cocoa farmer gets maybe 5 cents. So, you’ve got to add value to your products if you’re going to make money on the export of these products.

We have raw materials and in each district, it lends itself to value addition. In each district of Ghana, even if you are planting cassava you can add value by processing it into starch and exporting it. There’s so much – cashews, cocoa – you can process. 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.

The good thing about the “One District, One Factory” is that it’s not the government that is going to go and set up factories, rather it’s the private sector. By encouraging the private sector, we can have at least one factory in each district and that will help the whole industrialisation drive for Ghana.

How is the government hoping to ensure a bright future or to educate the population for Ghana’s next 60 years?

I think this is a very important point. The high number of youth that we have is really a potential strength for Ghana. This is why President Nana Akufo-Addo is bringing in this policy of free senior secondary school education (launched in September) for all in Ghana, so we can prioritise our resources to educating our people so they become an opportunity for the country. The hope for the youth is very significant.

What would you say makes Ghana the country of choice from an international investment point of view towards other countries in the region?

Ghana is a very stable and peaceful country with a working democracy and a very educated population. We have a lot of available resources – gold, timber, bauxite, diamonds, water, oil. Most importantly, there’s a sense that Ghana is under good management. The team that the president has put together can take this country to the next level, meaning it’s a great place for investors.

We will restore macroeconomic stability so investors will get a good return for their investment. Our markets are quite good, even the financial markets. Someone buying Cedi Bonds over US Treasury Bonds will make close to 20 times more in Ghana, even allowing for exchange rate depreciation. I think it’s reasonably attractive and we will continue to work to make it so.

Could you give us a brief message, to the readers of Forbes Africa, about this rebirth and optimism?

Our president said it best when he stated, “Ghana is a rich country and we are only poor because of poor leadership and we need to essentially have new leadership.” What we have with President Akufo-Addo is a really transformational leader. He wants to take the country to the next level so we are trying to do the things that will transform this economy. So, there is a lot of optimism. We are almost fearless in what we want to do.

We want to use our resources for the benefit of our people. Couple this with good management, fiscal discipline and an environment that encourages private sector participation will result in a massive growth in the economy. That is the direction we are moving in and it makes us very optimistic.

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