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One thing that the oil money should have offered the nation is cheaper money for investment in agriculture – Dr. Abu Sakara Foster, Executive Chairman of Sakfos Holding

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The Role of Agriculture in Economic Development

TVM: What is your general assessment of the current state of the Ghanaian economy?

ASF: Our economy in its current state is one in which the essential transformation of its nature has still not happened. It is still an economy based primarily on production and export of raw materials and not one predominantly described as a value added economy. The service sector has grown but not by servicing Ghana’s industrial sector; it is rather servicing imports. So the nature of the economy really has not changed much. However, in terms of the performance of the economy, what you are seeing essentially is a stabilization of the currency, the building of our reserves, which basically has contributed to the stabilization of the currency and steadying of the national inflation. All this not withstanding, bank interest rates (generally above 20%) are still too high for many primary producers and manufacturing industry to maintain and expand operations competitively in the domestic market. Also liquidity is very, very tight!

On the latter point,  recent enforcement of rules in the financial regulatory sector has meant an even tighter squeeze on the liquidity of funds. This action is however indeed good in one way because it will help bring interest rates down to a more realistic level as entrepreneurs progressively turn towards incentives to do more sensible business and turn away from more risky businesses. But in the short term these measures have dried up access to funds from banks, as they themselves have struggled to find money quickly to meet their obligations with the central bank.

So in terms of macro economy, there is a good turn around in terms of the fact that you have a stronger foundation for improved performance mostly from improved fiscal management. But when I say foundation, I’m relating to the performance of the economy, not the structural nature of the economy per se. By and large, it is a more predictable economic environment; but in terms of evolution from one kind of “creature” to another kind of “creature”, we are still where we are, an economy based on production and export of raw agricultural produce,  raw minerals, raw timber, raw fish, raw unconventional products and crude oil even when we have a refinery. This is where then major challenge of our generation lies.

TVM: Ghana’s economy has been predominantly agric-led for decades. For about two decades ago, there was a boom in the service sector and its continuous growth has seen agriculture over taken. What in your view might have accounted for this?

ASF: Of course the growth in the service sector naturally means that somewhere in the total GDP pie, some other portion of that pie must give.  The reduction in agricultural sectors’ GDP contribution relative to the increasing size of service and manufacturing industry and the mineral mining industry does not necessarily mean that agriculture is doing badly. After all in the final analysis, we want to have the agriculture sector reduced as a portion of it’s contribution to GDP if the manufacturing sector grows in return. We want to have the manufacturing sector grow because it is based on growth of domestic productivity growth and will most likely increase jobs and incomes more significantly. However the service sector can do grow without much domestic productivity increase in fact it may hurt domestic productivity growth and stall our competitiveness in our own domestic markets. That is not any guarantee that increased service sector growth in economies such as ours will increase the good paying jobs for any sustained period. Ultimately the wealth has to be created from somewhere and that in our situation is mainly from transforming the primary to secondary processed products.

In my view the service sector can grow but by only as much as the manufacturing sector is growing and it is servicing the domestic manufacturing sector. But if the service sector growth  is only servicing imports and the manufacturing sector is not growing very much, while agriculture sector is declining, then that is a problem!! Because it means that we are actually going backwards in terms of progressive capacity to have a home grown economy that is more robust and less susceptible to external pressures.

The increase in income from the oil sector has also brought about a new dynamic in terms of proportions of GDP contribution by various sectors, including agriculture. The impact of oil income on national GDP is not perhaps as big as one will imagine, but it has certainly influenced growth of the service sector because we had no previous history of a service sector for the oil industry.

All this recent growth means little if there is no evolution of the economy.  Metaphorically speaking if you are an eight-year-old child and that looks the like the size of a teenager, it doesn’t mean you’re grown yet, it just means you have only expanded in size. The evolution has not yet occurred. So we need to look more closely at how agriculture is contributing to transforming the economy basically from a raw material producing economy to a more value added agriculture. We must also closely observe the changes in all the technological innovations that comes along with investment in agro processing. It is happening, but too slowly. It needs to happen at a faster rate to effect that sorely needed evolution.

 

TVM: As a country, we’ve kept believing that agriculture is the back bone of our economic development. But then, unfortunately, the hypothesis has been disproved by the continuous decline of the agricultural sector’s contribution to GDP. Should we still continue to bank our hopes on agriculture as the basis for economic development?

ASF: The hypothesis has not been disproved at all; and we’ve not been believing. If we really believed, it would have happened. And that is the exact problem with agriculture. We say that agriculture is the backbone of the economy, but then when it comes to the allocation of the pie of the budget to it, sometimes it gets less than three (3) percent, or even a tiny little amount. You don’t need to go to Harvard Business School to figure out that in trading, the thing that is bringing you the most money is the thing that you have to spend your money on, in order to turn over more of it, to make even more money.

 

TVM: What in your view do you think are the main challenges confronting the sector from achieving its maximum impact.

ASF: There are three areas. The first is in the area of national policy which creates the medium within which everything happens including agriculture. The second area is the limits of knowledge base within the sector. Finally there is the service industry associated with the agricultural sector that provides it with inputs and marketing of its outputs. If we take these three areas, all of them have different kinds of challenges.

The main challenge in the policy area is a dysfunctional democracy that is not closely allied with the real things that matter in the economy. We can’t blame politicians alone. They have to get elected. So they respond in short term ways that the populace will appreciate but ultimately are ways that are detrimental to real growth of the agricultural sector. For decades people have called for a reduction of rice importation by any and all means possible. However the same people will scream to the high heavens if rice prices went up a pesewa because tariffs on imported rice were increased. Ghana has also seen the rise of “middle class political activism” that demands more accountable government and better balance of trade to reflect growth in made in Ghana products of which processed agriculture products should have the lion share. However policy makers have encouraged and boasted about the mushrooming of shopping malls filled with mainly imported goods that are consumed by the same “activist” middle class. It appears the need to win elections has dulled the capacity of governments to act more firmly in favor of the national interest to stimulate growth in the domestic agricultural sector.

The second issue associated with national policy is conviction by the leadership. There needs to be a very firm conviction among leaders that agriculture can indeed work sufficiently to give us the take-off we need the next phase of our national economy.  This will make us commit to it for long enough to make it work. Leadership needs to convince themselves and the populace that we can and will make it work!! Every country that has successfully transformed their economy from an agricultural base at the end of their colonial period did so with a very strong commitment and sometimes with only a single single crop. The Malaysians that we admire so much did it with only palm oil. And yet we have palm oil, yam, gold and so many other things. Mauritius transformed an agricultural economy based on only sugarcane to a modern value added economy.  

Fortunately or unfortunately, because we’re blessed with so many good things, we have so many choices. We have consequently dissipated our efforts trying to exploit all of them at once as and when it dawns on us. It is like a drummer with too many drums in front of him and trying to drum all the drums at once. There has to be a coherent medium to long term plan and a focus beyond four year terms of office. In addition to a national focus and we need to learn to live according to our pocket, a good manager should always tries to live within their means. The country and its citizens are carrying too much debt. We need to renegotiate terms even as we  work our way out of debt. Our national debt is not insurmountable given our resource base and it is in our debtor’s interest to give us more conducive terms to work off our debt.

Talking about the knowledge base, we have to have a system where we start looking at the variety of crops that fit our farming systems rather than the mono crops we relied on during the colonial economy that is still with us in great measure. The truth of the matter is that we know a lot more than we are actually applying because our researchers have come up with different varieties that fit many more farming systems, crop patterns and types of farmers. This sometimes leads farmers to make the wrong choices by opting for technologies that they cannot sustain. It’s like choosing a BMW car over a Volkswagen car but you can’t drive faster than 60 km/h because you lack the skills and experience. In spite of that you still want to join in groups talking about the pros and cons of a Ferrari versus a Ducati.  Farmers need to be educated to choose the right technologies for their level of capacity and at the same time take advantage to upgrade their investments to match their capacity through extension and farmer to farmer learning. Farmers that opt for high end technologies beyond their capacity can be likened to ordinary drivers that choose to run a Ferrari car but do not have enough fuel, a good road to race on and also lack the skill to control a fast car in the first place. Just because collapse of farms are not as dramatic as car crashes does not mean that they have less of an important effect on the national economy.

Our operators themselves (the famers and value chain actors) need to assess their capacity and know-how relative to the investments that they can make. I don’t think our farmers are ignorant, they know a lot and they’re quite experienced. If a farmer is not using a particular technology, it is not always because he hasn’t heard about it, sometimes it is because he/she has figured out that it doesn’t make any more money. This is because our marketing system does not always give them sufficient incentives. Also, the transaction cost are so high that sometimes they leave significant portions of the products in the bush.  We need to resolve that through development of farm track roads and greater use of appropriate rural transport to reduce the costs of the first aggregations and homesteads and subsequently at village markets.

 

TVM: In this age of technology, how crucial is agriculture to our economic development

ASF: Agriculture is still very crucial because it must form the platform that serves as a foundation for take-off of our industrial and manufacturing sectors. Agriculture is also where we have the greatest comparative advantage.  However three things need to happen to establish this foundation in sufficient measure. First, we have to intervene to turn our comparative advantage in agriculture to a competitive advantage. We cannot go and start competing with producers of space technologies and all of that very high end stuff. We don’t have even have comparative advantage for that yet.

In Ghana, especially the northern part, we have in abundance arable land, surface and ground water and a varied climate suitable for many crops and livestock.  With good climate it is a question of choosing the right combination of crops, applying the right technology both in terms of the physical equipment and inputs, and also the management know-how. Then we can be competitive in the market place. If Usain Bolt was sat in his lazy chair all the time, he could have never been a world champion in spite of his great potential. He has to go out and train to realize the potential is already there. Our policy makers profess our great potential all too often but what are we doing to realize even a little of that great potential?

This is basically where we have to make more effort and a very deliberate effort at that!  Beyond effort in agriculture, other parts of the economy have to be tuned to support the agriculture sector as the main point of thrust for the economy. When we do that for a consistent period, we get to a stage where we lift the whole economy and then other sectors can then start growing to then exceed agriculture in their contribution to the economy.

TVM: Do we need to reinvent the wheel as other developing countries are doing by focusing on agricultural development as a basis for economic development?

ASF: I don’t think we need to reinvent the wheel. The matter is we haven’t pushed the wheelbarrow far enough to the stage where economies can take off. So we need to push the wheels more and faster to get to the stage where it agriculture becomes a foundation for other sectors to take off organically in synchrony and yielding the greatest synergies. The other Countries like Malaysia and Mauritius did not forget about agriculture and then come back to it. Instead they rode on the back of Agriculture. They developed agriculture first and then it formed the foundation for their investment in other sectors. Also we have to remember that one of the key things that we use for development is human resources. So we need to empower and retool the people for productive engagements. That is another important reason agriculture must come first, it helps build the technological innovation skills needed for the other industries. We have to build agriculture as a foundation first.

 

TVM: But then, the government has rolled out several policies to revamp the agricultural sector with the flagship of Planting for Food and Jobs. What is your take on this and do you see this programme succeeding in the long term?

ASF: I think it is going in the right direction. Of course, there are teething problems with it and there are major challenges. It’s success is contingent on the determination to ensure that the fundamental things that have normally failed previous programmes don’t fail this one. So we must all resolve not to let it fail. If there is a threat that there will be no funding for it, policy makers should to sit round the cabinet table and raise the money for it by taking cuts from elsewhere, it is as simple as that. Why? Because agriculture is what is driving the economy and it must take precedence over consumptive expenditure that does not bring immediate income.  That is the kind of leadership direction that we need for initiatives such as PFJ to succeed. The fundamental thing that it is addressing is the availability of seeds and fertilizers at farmers’ doorsteps, using our own local seed producers and fertilizer distributors. Of course some seed is still are being imported, but we hope that will change in time in favor of locally produced seed. It doesn’t just change overnight, nor will it happen without persistent effort and investment in local seed producers and seed systems. We don’t yet have the domestic capacity to meet our full seed requirement. We have to build seed production capacity alongside growth of effective demand to ensure that the seed business is financially viable. For a viable seed system the seed produced must be sold. If it is not bought, producers will reduce seed production and some seed growers may get out of the seed business altogether.

We must strengthen the seed distribution for farmers to be able to buy seeds at their door steps. This means that seed dealerships between seed producers and farmers must be tackled effectively as a national priority and maintained as a national asset. The incremental gains that will accrue as a consequence of the dealership system will exceed its value for access to seed and inputs alone. It can also serve as a point of interface for output markets and evolution of the remaining agro-industry. We need to make these seemingly simple things happen for our agricultural system to work sufficiently well to support interventions and programmes like PJF sectors to succeed. I believe we can do this and already the early signs of success are showing. PFJ will succeed if we don’t blow it by taking things and people for granted.

 

TVM: In Ghana, the old folks practice subsistence farming. Being the executive director of the Rural and Agricultural Development Associates, how can the rural folks be empowered to turn the woes of this sector into fortune.

ASF: I think first of all when you describe our agriculture; it is a composite of different types of farmers. You have the small scale farmers who are subsistent farmers. You have the emerging medium scale farmers that are people who have determined that agriculture is where they are going to make a living and extra money from. Then there are the commercial scale farmers who have decided that they are going to put their lives to it for big time returns to investment. So our agriculture has a spectrum of farmers like an accordion. It is not a one single thing or type of farmer.

Now, it is true that small scale farmers in the past have formed a large majority of where we get our food from and are also the majority in numbers. Together small scale farmers make more money than the medium and large scale farmers. This trend will not however stay as it is in future. If agriculture evolves as we expect it to, then as numbers of the medium and large scales farmers grow, small holder farmers’ numbers will decrease. Small-holder farmers won’t be eliminated all together. Instead the remaining small-holder farmers will become more efficient. Even if they are still on small-holder allotments, they will become more productive and efficient. What we expect to see is that the medium scale grows significantly and maybe the large scale will also grow in a highly specialized market driven manner. Irrespective of the variations and specializations of different types of farmers there exists a relationship between them. That relationship and interdependence will grow stronger through linkages to market networks so let us not divide them artificially.

TVM: You spoke about you knowing older people that started farming and they falling out, so how do we now get the youth to be interested in this? How can the state make agriculture appealing to the youth?

ASF: Agriculture has to be appealing to everybody. If it is not appealing to the old people, it will not be appealing to the youth. And the greater appeal about agriculture is not as a hobby. It is as a business. No one has ever asked how we can make shop keeping appealing to the youth. If you have the capital, you go there and you make your money just like any other business.

Agriculture is however not an easy business like sitting and selling in a shop. Agriculture involves a certain level of difficulty because of its specialized knowledge and physical involvement, especially when one does not have the right equipment and tools. So one of the ways we can make farming more attractive to people starting is to have service centers for tools, equipment and specialized know-how. This applies not just for the youth but also for other farmers and value chain actors because it reduces transaction costs for ownership of equipment and use of services. It also makes service providers more accessible to farmers and value chain actors in rural areas.

TVM: A few years ago you cautioned the nation to focus on the soil not the oil. Can you explain why you did say that?

ASF: When the oil started flowing we were all dreaming and salivating about how this oil was going to change the whole economy. I’m glad you’ve raised that question. We’ve seen the oil sector come and stay. So what has changed?  Not so much and that is why I said at that time, focus on soil not oil. It was on the basis that if we were to see a big transformation then what ever income was coming from that oil, should go into the soil! At least the interest from the saved oil income should go into the soil to address all these challenges we’ve enumerated above to give us that quantum leap we expected from a completed foundation in agriculture.

“One thing that the oil money should have offered the nation is cheaper money for investment agriculture.”

It should be used to make sure that we have the range and volume of seeds and equipment needed to make productivity higher on a big scale. We should not be relying on donor funds that may have their own priorities, areas of focus and limit on the scale of investment.  With sufficiently expanded scale of intervention in agriculture, would come many fold increased incomes from agriculture. Concurrent scale of investments of the cheaper money in improved agro processing would have also pulled up price incentives to sustain the production because higher profits from the added value goods can be shared as price incentives to sustain flow of raw materials to factories. Currently, operators have mills that are not getting enough rice because cost of financing operations greatly limits their capacity to share slender profits. The price structure of commodities across the entire value chain must be scrutinized to ensure a strong incentives for operators either as producers, farm service providers and aggregators. There are many jobs in agriculture apart from production.

The second thing I meant by that was, when you focus on the oil, how many people will be employed into that sector? How many towns can be touched by that sector? If you are not in Takoradi, you won’t know that there’s oil in Ghana. You don’t feel anything. But if we invest those monies in the soil and there’s soil everywhere in Ghana, the impact on people’s lives will be far more pervasive and we would have all felt it by now.

At the time, I said categorically that the best way of managing that money was to pretend we did not have it. In other words, all of it, not one drop should have been brought into the normal economy. All of it should have been kept out of the economy in an investment fund. And we only use the interest from that fund to reduce our rate and cost of borrowing. We could also fund specific turn key projects that are arranged in a hierarchical order of priority setting and they feed into each other. It would have helped us know just how much we take each year taking as chunk of money. In return for that money we must see at the investment period its end product and its value for money on the ground. For example if it is a railway we want to build to reduce transportation costs, we take the chunk of money and build the railway. We would not borrowed the money from anywhere and the railway is in place.

 

The Personality profile segment

TVM: When I started the interview, I did say a lot about who you are and your personality. When you go onto the internet you can read a lot about yourself but then it is always best to hear it from the horses own mouth. So who is Dr. Abu Sakara?

ASF: Well, I’m a family man.  I have been married for 36 going on to 37yrs with the same woman and I have four grown up children. The eldest is 35 years, the next is 32, then 29 and the last is 28yrs old. They are now adults, three ladies and one gentleman. We basically are a very close nucleus family and I’m also close with my extended family too. I come from a family of 22 children and 5 wives. We are the first generation of truly monogamous people but marriage in our culture is still predominantly polygamous.

I had initially had a village upbringing. I was born in Damongo but lived in Kpembi near Salaga for the first 6 to 7 years of my life. I grew up in my great grandfather’s house (the Sinbung royal household of Kpembiwura  Lanyor I). I learnt so much form the village life and my character benefited immensely from their culture of sharing and caring. Above all it left me with a strong identity and high self esteem.

My first crossover happened when I went to live with my father S.S. Sakara, the then Distrct Commisioner for West Gonja in Damango. Living with him in his European style bungalow with European accoutrements and affectations was very restrictive. I liked my freedom in the village  and felt like a prisoner in the bungalow life. But of course it had its benefits for learning academically and struggled to learn how to sleep in the afternoon, siesta!.

Then I went and visited my other cousins in Western Gonja who taught me the differences in culture between Western and Eastern Gonja, so I learned to become a cultural hybrid with capacity to cross over in accent and names of things. Capacity for cultural crossing over has been a major theme in my life. I have  lived between cultures both East and Western Gonja, African and European culture and Eastern and Westen Africa.

I  left for the UK when I was 12 years old. I went to school and grew there so I had to learn to live in that environment. When I became older I started travelling to other parts of the world like Latin America. My experiences have shaped who I am, because life is a sum of all our experiences.

 

TVM: You are one the few celebrated personalities in your field of endeavor. Was this what you always wanted to do?

ASF: When I was younger, I was very active. I was always dong one thing or another.  I initially struggled academically because I wasn’t paying enough attention but one day I was sat down by my foster parent and I learnt  and fell in love with the art of reading and that changed my world.

When I was in England I started doing a lot of sport and I got very much involved in judo. I rose very quickly through the belts and I won the England school boys at 15 years old. Later on I served the national judo team for the u16 and u18 at the same time. And when I was a bit older I was in the u18 and u21 men’s team at the same time. So that took a lot of my attention and at that time I thought my career was going to be in professional sport.

Unfortunately for me I tore a cartilage when we were at the Junior European championships in Bad hamburg, Germany in 1977 and I was required to take some time off and it came just at the right time because I was between 6th form and the university. As a matter of fact, I tried to overcome that and my attempt to get back quickly splitted the stitches so it took a longer time to recover. Thw long lay-off helped me make up my mind to actually go to the university because at the time, though I had a university placement at Reading, I hadn’t quite made up my mind to go yet.

I got into agriculture not because I made a deliberate decision in terms of career choice. It was simply because I had the sciences under control and that was the course that gave me an intercalated year abroad. So I was looking forward to this year abroad because when I saw the brochure, it was somewhere in the Philippines.   I thought if I do this course, I’ll get to go abroad for one year. So I chose the soil science course, only after the second year to find out that I had to win an award scholarship first.

I initially lost hope of going abroad because I didn’t think I had a fat chance of getting that Scholarship considering a student population of more than 18,000 at University of Reading at that time. But, my tutor was very insistent so he went and brought the forms and asked me to fill the forms and bring it back. I filled the forms and on the appointed day went to sit the examination for the scholarship. After leaving the examination hall I just took if off my mind because of the multitude of students that sat the examination.

It was a few months later when the result came to my surprise and I won it. The Dean called me to his office and asked me where I was going with the award? I wanted to go to the  Philippines but he advised IITA in Nigeria because he had been working in Nigeria as a researcher. So I after my seconds year at University I went off to Nigeria for one year as a research scholar.

When I came back to England, I was completely sure that I wanted a career in International Agricultural Development as a Scientist. So may career choice did not happen in a day. It took a period of two years. But by the end of that two-year period, I had submitted my research work and people had gotten to know me and I knew what international agriculture was about. After graduation, I applied for a post graduate training awards with ODA and went off to do my masters at Wye College London University and then off to Mexico for another year that turned out to be three years and  Ph.D. Since then I have been travelling with my work until I arrived in Ghana from East Africa via Washington.

 

TVM: You sought to become the president at some point in time. Given the opportunity for you to assume that position or that portfolio, what key things would you want to do as a president that would change or transform this country.

ASF: The way I’ll approach it is to ask: what can I do as an ordinary person? And then, what can I do as a president that I can’t do as an ordinary person? I will then as a President address those things that I cannot do as an ordinary person.

As an ordinary person, I’m within the policy environment created by others. All I can do is to try and do my best to make whatever I’m doing work well within the limits set by the policy makers. But as a President I can change the limits set by policy makers. This is especially true for developing countries where institutions are weak and policy is still maturing and not well defined. There is obviously less room for maneuver at ministerial level than at the presidency level where the President has the greatest influence toset that policy environment for everybody else.

We have institutions in Ghana and we shouldn’t belittle them because there are  in countries where they are almost non-existent. So I have great respect for our country and what we have achieved as a democracy of sorts. But nonetheless, we are a developing country, not a developed country. Sixty (60) years in the life of a nation is like six years in the life of a man. The countries we admire so much and try to emulate have been around for hundreds of years and yet we want to fly at the same pace. Yes, we can all aspire to shared values but the rate at which such values become an integral part of our society will differ. Values demand an understanding and common acceptance of certain ethics in the society. There is need a cultural adjustments take time to make between generations.

I think that there’s still opportunity to mold or shape our country in a different way along a different path. When I think of the role of a president, what is important is the opportunity to mold and shape the country not just for the present but more for the future. I’d like to be able to address those things that are fundamental to the system of governance, the architecture of our economy and the kind of society that we want to become. And these are three separate areas that all must be worked on in tandem with each other.

I think naturally, one will ask: “So what would you do differently?” For me, I perceive that you can be a president that presides over the most efficient incremental gains but you leave with nothing really fundamentally unchanged. Or you can be a president that seeks to restructure, recreate so that the country can have big quantum leaps thereafter. Those are big challenges. Of course it is not one or the other because there is a graduation in between the two options. One must however pitch camp decisively towards one of them as the totem pole for a presidency.

I think my desire to see some big changes and be able to count them off the tip of your palm is a driving force for any ambition I had to be president. I would definitely want to go with referendum agenda for governance (one six year term limit), organize Ghana into 25 regions as units for decentralized government and abandon the farce with local government a district levels, change nature of the economy (scrap export of unprocessed cocoa beans, timber, Gold and oil) and achieve self-sufficiency in rice production in five years and sugar production in 15 years. Ensure renewable energy for 20% of our energy needs and grow our jute (kenaff) for bags so that we can completely ban use of plastics as bags. And have a compulsory two year army service for all 18 to 29 year olds.

Normally when you ask people what they’ve achieved, they start mentioning so many things but many of those many things are not fundamental changes and will be swept away in the sands of time. This is not to praise the president because he’s my friend but when you look at what has transpired over this short period, what I like is that I can count some fundamental things.

  1. He has tackled a big challenge in the education sector at a fundamental level free universal education up to secondary level
  2. He has began the journey for change in architecture of governance by the creation of five new regions
  3. He has achieved a monumental task of peace in Dagbon which eluded so many for so many years. Yes many others were involved but without his steely determination it could have easily gone on for another five years.
  4. The progress with rail transversal rail transport and industries is too early to count. So I will hold back on that for the moment, the reopening of Obuasi mines not withstanding. We must wait for the commissioning of an oil refinery that stops export of our crude oil and a Gold refinery that stops the export od unrefined Gold and indeed makes it illegal.

 

TVM: The free education?

ASF: Yes the potential  impact of free secondary education is huge. Because free universal education to secondary level will restructure the numbers of people in education and it will have a long term impact if we do it well. It help to prepare Ghana to be able to absorb those people that will come off the farms and give them the  technological skills that we need to transform the economy in a significant way.

Secondly, the recreation of the regions will fundamentally change the architecture of governance in a sense that you will have 16 region. For example, in the Northern Region we had one region covering 30percent of the land mass of Ghana, now we have three regions having 10percent each. What it means is that it will bring the higher caliber of people that one needs at the regional level to stimulate the growth and development of the region.

Also is, the long standing Dagbon crisis which has now been resolved. Again I mention these only to highlight the fact that the hard things are the ones that are worth doing and they make the biggest difference.

TVM: Should Ghanaian still be considering you as a potential presidential hopeful?

ASF: That’s a difficult question to answer. I think if something is in your destiny, it will come to pass. I think every person that has a public spirit will answer that call if it comes to you, at the right time and in the right way.  As I said, for me what is important now is to focus on building a strong agribusiness as an example of what people in agriculture can do to help people in a qualitative way, not just a quantitative way; because if I don’t do that who else is going to that?

Above all, I think there are many people who can answer that call so at the right time, if we’re lucky and blessed, we’ll get the right person to answer that call, it could be me or it could be someone else, I don’t rule myself out. In the meantime I am doing what I advice all technocrats to do, excel in your area of expertise in the private sector if you can. I like the example of the proprietor of Asheshi University.

 

TVM: How would you describe your leadership style?

ASF: I am a fairly open person because I was brought up that way. I’m also somebody who believes in systems and their principles. I tend to find my patience with people who want to bend the rules is a little bit short. I believe very much that you can only make headway if you follow the principles.  One of the things I’m not very tolerant of is that in Africa, we believe the there should be different rules governing our conduct with regards to time, seriousness and morality as if the law of gravity doesn’t apply in Africa. Time is the same anywhere. Whether you are wearing a Rolex watch or a Timex watch, it is still the same time. Whether you are in Ghana or somewhere, same is the same  in its amount. We have to give time a higher value.

It is very important that our country works and follows systems that have been proven and tested. And my leadership style is always to make sure that I push people in that direction.

 

TVM: What kind of books do you read?

ASF: I like to read biographies of people that have achieved a lot. Their lives are very instructive and also gives one a firm conviction that if one persists, one will succeed. I think sometimes, reading about other people’s lives helps. I also read science fiction and mega trends in the world.

 

TVM: what genre of music do you like?

ASF: Generally, I like cool music. I also like cool jazz as well as modern music because I’ve children. I know what Busta Rhymes sounds like. Not that I like it much but I follow what is happening and of course I’ve seen the trends and the genres of new music coming.

 

TVM: If you had the opportunity to right a wrong, what would it be?

ASF: I am somebody who has always moved on. My attitude has not always been not to cry over spilt milk and that is one of the things my foster parents built in me. My frame of mind really is always getting on with the present and the future, so I don’t like to dwell too much on the past.

TVM: A lot of Ghanaians know you as a politician, an agribusiness entrepreneur, an agronomist, what else do you do?

ASF: That’s more or less the sum total of my life. If I’m in consultancy, it’s an agricultural and development consultancy. If I’m in politics, yes it’s about society but I would like to drive the emphasis on the role agriculture can play in shaping the country because I never let go of that part of my life. I don’t try to be something that I am not, you know, I think I have a fairly broad education that allows me to integrate sources of different knowledge and use it but when I want specialized knowledge, I go to the person who has it if I don’t have it.

 

TVM: In your lifetime now, what would you want to be remembered for, as your legacy?

ASF: My legacy would not be complete without being successful in agribusiness. Because, the intellectual and development part  of my career have been done. But I want it to be punctuated with tangible success in agribusiness as an entrepreneur. I want to leave that as my flagship of an intergenerational wealth creation industry. I want to be remembered for taking a successful risk with my own resources and savings  legacy to create not just a production industry but a processing industry that is sustainable over time. I want to be remembered for putting my money where my mouth was. I hope it will be successful, if it is it will be a real legacy. As you know it is important because we can decide that from today, we’re not wearing any make-up, we’re not buying any Brazilian hair anymore. We can even decide not to buy Lexus cars or not to wear expensive suits any more, BUT we can never say we won’t eat!

 

TVM:  Interesting, now with everything that you said, I would want you to advise the government, especially, on what to do to make agriculture more productive and make the economy benefit more from agriculture, make the sector more valuable.

ASF: The real issue about agriculture is that we must walk the talk. If I would give advise to anybody, I’d say walk the talk. Let’s not talk and we don’t walk. If you walk the talk, we know what we need to do and it’ll be done. But we cannot leave it for one person to do it because that person needs help and we have to make sacrifices in other areas for it to happen.

 

TVM: How about advice for the youth and your parting message for Ghanaians?

ASF: To the youth, they should decide what they want to do; decide where their passion is, cultivate their skill set and the relevant industry experience. Rise to the zenith of their profession and then get into policy making to expand their impact. Also, they shouldn’t believe that certain things are not achievable either because they don’t have money or they come from a certain background; the human potential is vast.

The opportunity to change, the opportunity to adapt, the opportunity to overcome are always there for the taking for the person who has the courage to dare. So be somebody who dares. Don’t accept the status-quo. Push the boundaries and I’ll say for African youth that is very important because our societies are changing but not necessarily in the way we want them to change. We are subject to so many influences and we’re copying many things we shouldn’t copy, but find out who you are. Interrogate yourself: who am I? You cannot be who you are separate from your cultural identity. Put faith in your character not your degree. Don’t be rude and arrogant because it is fashionable. So just build your identity, character and passion.

 

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“In order to bring about a fundamental transformation of our economy …” – Dr. Kwesi Botchwey, Former Minister of Finance, Ghana

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“Rethinking Ghana’s Economic Development after 62years of Independence”

Ghana marks its 62nd independence and many still wonder if the number truly reflects its developmental achievements. The questions boggling many include: where have we gone wrong, what did we not get right, how did we get here? Some even go to the extent of comparing our development with countries such as South Korea, Singapore, Malaysia and the likes. In this all enthralling and thought-provoking edition of the Personality Profile, Team Vaultz meets Dr Kwesi Botchwey to discuss the most crucial topics on the minds of Ghanaians and find ways of rethinking the country’s economic development after 62years of independence. Dr Kwesi Botchwey is termed the longest serving finance minister in Ghana who led a team to restructure the failing economy between 1982 and 1995. The Professor of Practice in Development Economics at The Fletcher School of Law and Diplomacy of Tufts University in this interview offers some suggestions that can help to rebuild the Ghanaian economy after 62year of independence.

 

TVM: Thirteen years as a finance minister in charge of Ghana’s economy. How did that feel?

Dr. Botchwey: It was very demanding, challenging, and mostly stressful but yet fulfilling. At the end of it all, when I look back, I feel a sense of some gratification

 

TVM: Ghana is 62 years this year. You have been at the front and have understood how our evolution has been. Give us your understanding of how the Ghanaian economy has felt like, studying through the literature; pre-independence, independence and post-independence.

Dr. Botchwey: Well, the story of Ghana’s economic development, according to some, is a very simple one. The most familiar one is “The grace to grass’ narrative that simply says Ghana was a sort of model colony, a country of tremendous natural resources, a good civil service, and a cushion of reserves of about £200million, equivalent to about three years import cover at independence, a legacy that we somehow squandered.

That is the familiar narrative that then goes with our comparison to the Koreas and the others who have done so much better, to drive home the point.

The real story though, is a trifle more complex. To begin with, yes, we were a country of tremendous natural resources at independence and had a very good and committed civil service and all that. But the country was still your typical under-developed country; agriculture was still basically cutlass and hoe activity and we were very dependent on cocoa production and had very little in the way of an industrial base. Indeed we lacked the skill sets for rapid industrial development.

So, Yes and No. We were not exactly the model colony suggested by some in the literature, but were better off than most. In the 50’s when Kwame Nkrumah and the CPP were managing affairs in the transition to independence, the country followed pretty much the path that the colonialists had charted: a stable exchange rate regime, and a cautious monetary policy.

And in the first five years of independence, at least, until 1961, when he launched what was, at least by self-assertion, a socialist path characterized by state – led industrialization and development and a whole host of industries, in just about every aspect of the national economy. It’s important to bear in mind that it’s not as if Nkrumah inherited this bountiful legacy and just squandered it.

This was a time when state participation in the economy was more or less the norm for developing countries. So, Nkrumah’s strategy of state – led industrialization was by no means reckless, although it is not to say that the strategy did not meet challenges.

 

TVM: Was it more tactical than strategic?

Dr. Botchwey: It was more in the implementation of the strategy and in the challenges of governance and good management of the infrastructure and large public investments that were made. The strategy continued till the coup in 1966. President Busia, in his short reign, signaled a change to a more-private sector driven development and all that; but nothing really happened.

We muddled through our economic development for a long time till the onset of the 80s. By the 80s the economy had become shackled by controls – exchange controls, price controls, trade controls, import licensing etc. The exchange rate was fixed and  stayed at GH¢2.75 to a dollar for a very long time although nobody in his right mind who had dollars would surrender them to the bank voluntarily to exchange at this official rate  when on the black market, it sold for GH¢ 10 or GH¢15. Successive governments avoided taking any corrective action to avoid any political upheavals and maintained the peg to the ruin of the economy.

As the exchange rate got hugely overvalued, the export sector including our main export cocoa collapsed, as many cocoa farmers left their cocoa to rot in the bush. They reckoned correctly that that the price they got at the official exchange rate for their cocoa barely even covered their cost of production.

 

TVM: Really?

Dr. Botchwey: Yes, which is why with Rawlings’ first coming, many students were actually deployed to the countryside to help with the collection and carting of cocoa from the hinterland to the ports. There were widespread shortages of basic commodities and inputs for agriculture and industry. There were shortages of virtually everything. The country was literally on brink of total national disintegration. Even so nothing really changed till the mid – 80’s.

It was a very challenging conjunction. We had suffered three successive years of drought accompanied by bush fires that raged all over the country and caused the loss of a substantial acreage of food and tree crops. Then in the mist of all this, many of our country men and women, the relatively better trained and skilled segments of the labor force who had fled to neighboring countries in search of a better life were sent back. Suddenly, we saw a 10% increase in population amid the famine and economic collapse.

That was the setting in which I became, first, the Chairman of what was called the National Economic Review Committee (NERC) and then subsequently, after a few months, was appointed the first PNDC Secretary for Financial and Economic Planning. I must hasten to add that it was a team that was put in place.

I only happened to be the leader of the team but the work was done by the team including Dr. Joe Abbey, one of our leading macro economists and a former Minister of Finance himself; the late Dr. Gobind Nankani who was working with the World Bank but would come and help with macro-economic analysis and programming; Mr. Ato Ahwoi; Dr. Assibi Abudu, Dr. Kobinah Erbynn and Nrkrumah’s last Minister of Finance, Mr. Kwesi Amoako Atta.  Our task was to war to fashion a radical program of economic and social transformation, open up the economy and just make things work.

 

TVM: Move it from the controls?

Dr. Botchwey: Well yes. The controls were not working to start with. People would get import licenses at GH¢2.75 to a dollar and would not even bother to import anything. They would just sell them to willing buyers. The reality was that the cedi was grossly overvalued. Even the State Gold Mining Corporation could hardly pay its workers.

Whatever gold they were producing was dwindling because they had no resources to bring in spare parts, and auxiliary products. They were coming to the budget for support to pay their workers. Not only were they not paying any tax to government, they were taking from government. Our studies revealed that it cost the corporation more to produce a dollar’s worth of exports than they received at the prevailing exchange rate.

We eventually freed the exchange rate and made it market determined. It was not a popular decision. It caused fissures and cracks within the ranks especially of the progressives with some taking the position that this was a neo liberal solution that the revolution wasn’t meant to pursue.

But we forged ahead and launched a phase and integrated exchange reform plans that combined adjustments in the exchange rate and trade reform, thereby bringing about a gradual and to some extent dramatic recovery in exports and output. Long story! But we did.

 

TVM: Could that be based on the confidence in the economy?

Dr. Botchwey: Absolutely. Many African countries were suffering the same ills but were deterred by the prospect of social and political opposition to corrective measures, preferring instead to live with stagnation.

We bucked the trend. But the Program of Reconstruction and Development, as we called it, wasn’t just about exchange rate policy and trade reforms. It was also about a massive program of social and economic infrastructure rehabilitation, better expenditure management and discipline, better public expenditure programming generally, improvement in fiscal policy and social welfare, and civil service reforms to improve efficiency and compensation levels. Indeed social welfare spending went up steeply as a percentage of government expenditure over the program period.

We set up all these institutions that we now take for granted: the forex bureaus, stock exchange, among others. Importantly, we instituted wide ranging reforms of the financial and banking sector which had been badly affected by the general economic crisis and had suffered a major loss of public confidence. We recognized that the crisis facing the banking sector was that they were weighed down by huge non-performing loans of state owned enterprises (some of it guaranteed by Government) and that of the private sector.

Essentially, we removed from the banks’ portfolios all non- performing loans to state enterprises and the private sector, and either offset or replaced them with Bank of Ghana bonds. The banks were thus able to meet the new Capital adequacy requirements within the stated period. All this was accomplished totally transparently, with the full participation of stakeholders and without the uncertainty, the politics, turbulence and angst. The non-performing loans were then vested in a newly created Non Performing Assets Trust (NPART) which was charged with recovering as much as was possible.

 

TVM: That was quite of bit of work!

Dr. Botchwey: that’s an understatement!

 

TVM: You did some privatization as well?

Dr. Botchwey: Yes we did. It was an important part of the reform program and perhaps the most difficult from the political economy point of view. We still had a large number of state enterprises about 200 of them, covering mining, transportation, agriculture, services and the utility sectors. Only a handful of them were operating profitably. The rest mostly had huge financial and structural issues.

We privatized about 50 of them in my time, and those that remained in state ownership, were put through reforms aimed at improving performance. They were made to sign performance agreements with government and legal mechanisms were put in place for the improvement of the financial accounting and the institution of a better framework for assuring the accountability and operational autonomy.

 

TVM: These must not have been easy decisions.

Dr. Botchwey: Of course not. For me personally, some of these measures were rather awkward. In fact, even the turn to the IMF, was awkward given my well known criticism, at that time, of the role of the IMF in low income countries.

 

TVM: I saw an article online that said Kwesi Botchwey, the socialist. So you have obviously taken decisions like these that went against your socio-political thinking?

Dr. Botchwey: Oh Yes. Yes I took many knocks from both the left and the right. The left from those who preferred that we went the way of the Paris communards during the French revolution and the right from those who thought that even my elan and dress code on the job was somehow incompatible with socialism or what you call my socio-political thinking.

This is not the time and place to respond to these criticisms, there will be such a time and place sometime. Suffice it to say that I take Marxism very seriously to this day, and see it as the foundation of social science. I never forgot that Marxism, required a concrete analysis of the concrete situation when faced with any situation. So when I was confronted with the economic crisis that we faced, with state enterprises that we couldn’t run, with workers taking over state enterprises as they did then notably with GTP and running to the budget for financial and other support, and with the prospects of legal action by previous owners of these factories staring us in the face , and so on, I knew that I couldn’t say that in the name of Marx’s theory, I was simply going to find money that wasn’t there to give to the workers. Then I knew we needed some sustainable policies even if as a transition to whatever else we wanted to do rather than stick to the dogma of an ideology and other people’s idea of ideological purity or…

 

TVM: Stay true to your principles.

Dr. Botchwey: Yes. I often remind my friends, sometimes to their irritation of Marx’s observation that we make our history not in circumstances that we wish, but in circumstances that we confront. I couldn’t wish into existence a stable and prosperous economy in which money was just plentiful in the budget and we could deploy money any way we wanted. So there was some pragmatism. Anyhow, the result is pretty much what we see today.

 

TVM: Listening to you, I heard you talk about the exchange rate. Let’s do some ‘juxtaposition’. The exchange rate is still a problem today. So, are you really seeing a difference between the economy then and the economy now?

Dr. Botchwey: I have over the past few years often asked myself whether we are going back to the brink of the crisis of the 80’s. I think not. Yes, we have an exchange rate problem, between December 2018 and February 2019, the exchange lost about 13% of its value against the dollar, compared to a modest appreciation in the same two months period in 2018. The President himself is on record as saying he is not happy with the slide.

The consternation is understandable. When the cedi’s value drops, especially steeply, it does have consequences that are destabilizing for businesses, and consumers alike, it doesn’t make planning easy. It is something that must be moderated and kept within a band that is sustainable.

I see two problems, one is that the public’s perception of the magnitude and causes of the problem is in part a function of the narrative from some policy makers that suggests that the stability of the cedi is just a function of the sheer brilliance and competence of economic managers and that, by sheer dint of such competence the cedi can be somehow immunized from the vagaries of the market.

The other problem is that the public discourse on exchange rate issues is so ridden with partisanship, arrogance and even insult that a principled discussion becomes impossible. The truth is that nobody is omniscient and I mean nobody! Among economists there’s always room for disagreement. It is not for nothing that George Bernard Shaw the Irish playwright, polemicist and social activist, famously said that “if all economist were laid end-to-end they’d never reach a conclusion”. We must foster an environment in which principled and dispassionate debate is possible.

 

TVM: What’s more important? If it is possible to separate them, what should I deal with first? Do I deal with the exchange rate hoping that all other things will work or I need to deal with all other things hoping that it will influence the exchange rate? What do you go for?

Dr. Botchwey: Well the two factors are rather dialectical but if you had to make a choice on pain of death I would have to say the latter. You deal with the factors affecting a particular episode (such as this recent one or the one we had in 2014). First, you identify and deal with the proximate causes such as seasonal and other short term factors and hope that the particular episode subsides.

And then you deal with the longer term structural issues in the economy that affect foreign exchange demand and supply. Trust me there is no magic bullet. We’ve been here before this latest episode and it won’t be the last.

 

TVM: There are those who argue that there was a strong call that was made at independence that the Ghanaian was capable of managing his own affairs. 62years down the line. Are we really capable of doing just that; what’s your assessment?

Dr. Botchwey: Yes, we are capable of running our own affairs and we have by and large been managing (and mismanaging) our own affairs. But it is interesting you ask: are we capable?

Of course, we are capable. If you are asking whether we are really in charge of our national economy, do we have ownership of our national development policy, well, that is a bit complex.

As Ghanaians we own the Ghanaian economy at least nominally. A good chunk of it is owned by those who provide the funding and investments, some of it is also influenced by those who give us support. But not only are we capable, we can also be the ones who decide what our developing policies shall be. I recall in 2014 when we were going through a similar exchange rate crisis as it is today.

The cedi had lost over 30 percent of its value dropping off about GHc 10billion of our nominal GDP at the time. A number of measures were introduced by the central bank, and some attempts were made to introduce new revenue models and some were condemned as “nuisance taxes” and all that. That was the very activity to deal with the crisis that beset the issue. The government actually then called a forum, The National Forum, that met in Senchi. I had the good fortune to chair the committee that was to look into macroeconomic policy issues.

And it would be interesting for you to know that, I chaired that committee and it had people like Sydney Casely-Hayford and Franklin Cudjoe on it and we discussed the matters openly and frankly. The NPP boycotted the forum as a party but there were some NPP delegates there. So we discussed a lot of things. It doesn’t matter what we say, nobody knows everything.

So we had to pull together and a number of good decisions were made. We noted that we had lost policy credibility as a country so inward flows of investments were being affected, donors were more reluctant because we had set ourselves policy targets that were achievable but we had missed them for three successive years. So, the market did not believe whatever we were saying. It was a good forum. Unfortunately, the follow up wasn’t as good as we had hoped and so the body of consensus that had been built somehow got dissipated.

 

TVM: In 2019, Ghana is expected to exit the IMF program. What are your thoughts on this entry and exit to the program? Are we ready to exit based on the experience you’ve had? And how do we ensure never to get back onto the program anymore?

Dr. Botchwey: Interesting! It is important to understand that we are a sovereign country. Nobody can force us to go to the fund even in crises. It is always our choice.

We go to the fund when we need to. With the International Monetary Fund, all the countries join it to get some funds except for those that the US won’t grant membership. Developed economies, when they get into trouble even go there. The IMF was set up after the Second World War as a body that will help countries in Balance of Payment crisis and provide them support in other to dissuade them from resorting to policies that are destructive for international trade. So, the IMF and the World Bank were set up to provide the multilateral institutions that would provide members with support. And we are members. It is for us to decide if we want to go there or not. We did in 2014 but we’re sovereign. We can leave when we want.

Now if we say, we don’t want to ever go to the Fund, it is fine! That’s our prerogative, provided we pursue policies that gives us the credibility that the market wants. This program was supposed to have ended in 2017 but was extended for another year. Now it is coming to an end. Should we decide that when the program comes to an end we won’t renew it, fine! It is all very fine provided that, as a country, we have internalized the discipline of living within our means, subjecting ourselves to fiscal discipline that we need in order not to create the conditions that will take us back to the fund or make the return to the fund necessary.

Secondly, people talk as if the IMF rains conditions on our heads; insist we keep a low deficit, insist our other macroeconomic indicators are fine– low inflation, growth, employment, generating growth and above all, keep our fiscal situation stable.

People forget that even without the IMF, the market today will subject every country pretty much the same conditions. If we choose to go to the bond market, they will look at our budget, look at our ability to pay back the debt etc. In 2014, we went to the Fund because we wanted policy credibility plus resources of about US$1billion, plus a crowding in of private sector investments and donor assistance.

 

TVM: So, it’s not even an issue of going to the IMF but an issue of discipline?

Dr. Botchwey: Yes, it’s an issue of discipline which the market will compel you to demonstrate anyway with or without the Fund. We should not be under any illusion that when the fund is not here we can do whatever we want. Sure we can but we shall bear the consequences.

 

TVM: And five years down the line we will be back.

Dr. Botchwey: Yes. Quite possibly. If you look at our history, I have heard some narrative that suggests that one party, is a better manager of the economy than the other. The facts don’t bear out that kind of narrative. If you look at our history well, you’ll find that we spend years messing up, especially election time, then we wake up to the realization that there is a problem and so we spend three years sorting ourselves out till another election comes then we mess up, then we come back, do fiscal consolidation, get things back on track and sail through until elections come again and we overspend again.

This has been happening quite consistently in our multi-party experience more or less and that has to stop. In order to bring about a fundamental transformation of our economy and make a real dent in poverty which still afflicts our people, we need to be growing at about 8-9% per annum for a generation. One of my biggest worries in my moments of sober reflection is that, at the rate we are going, even when we think we are doing better compared to previous regimes, I fear that very little is going to change and our children in 30yrs will be facing some of these same issues, there wouldn’t have been a really fundamental change in their condition.

 

TVM: So from your estimation, we must be doing around upwards of 8% consistently for almost about a generation?

Dr. Botchwey: Yes, consistently for about a generation. We need to have policy continuity in its essentials. China has done something no other country in history has done. They have brought over 700 million people out of poverty. I mean, out of poverty! Their lives have changed fundamentally just in a generation. We need to be looking at what China has done a lot more carefully.

 

TVM: Once we cut ourselves off the IMF, would there be an impact on the already stretched foreign exchange?

Dr. Botchwey: It depends. If we wean ourselves off the Fund and demonstrate that even without the external restraints that come with an IMF program we will continue to act responsibly in the management of our economy (and politics), that we’ve internalized the discipline of prudent fiscal policy and demonstrate this for an extended period straddling election cycles and political transitions, we will be fine.

But let not get ahead of ourselves. Even developed countries do have recourse to IMF supported programs, even if infrequently. The so-called East Asian Tigers, among them Thailand, Indonesia and Korea with which Ghana has been compared frequently, have had recourse to IMF supported programs in billions when they needed to, During its boom years, Korea made huge investments mainly financed by external short – term borrowing, and when the economy and export growth especially slowed, these large loans caused huge problems for enterprises, in unutilized capacity low profits and severe cash flow difficulties for enterprises and for banks, large non-performing loans.

Korea actually nationalized KIA after Banks refused to lend it money and when traditional policy responses failed, Korea turned to the IMF as the best and perhaps in the circumstances only feasible option. But sure we can say good bye to the Fund and survive, even thrive. Let’s just remember it’s not like eating a piece of cake.

 

TVM: Control our borrowing, drive up our revenues and spend wisely?

Dr. Botchwey: Yes. But you see, all these require something that a lot of politicians do not like to hear. We need both fiscal space and political space. When an incumbent government is in the trenches and must take actions and policy decisions, that are hugely difficult and unpopular and challenging, it needs to create some sort of national consensus, across parties so that it doesn’t look over its shoulders and worry about other parties taking political advantage. There must be a sufficiently large body of national consensus around the basic direction of our national economy. We must live within our means, borrow prudently making sure that the monies we borrow don’t cost more than they should and that they’re invested prudently.

Above all, we can’t transform this economy in just a few years, nobody can. It is not a matter of genius. Nobody on this earth has the kind of genius that can bring an end to poverty and youth unemployment in two years. If that were possible, why would any country be poor? Find the geniuses, bring them to a country, give them two years and, bingo! Nobody can do that.  It can’t be done.

 

TVM: “Ghana: A country of wealth, a people of poverty.” Ghana is a resource-rich country yet with people who are embedded in poverty. ‘Good Growth and Governance in Africa: Rethinking Developmental strategies’ is a book you co-authored with noble prize winning economist Joseph Stiglitz. In your view, what accounts for this situation in the case of Ghana? What are we missing?

Dr. Botchwey: Yes, we are a country of enormous wealth. We often tell ourselves Ghana is a rich country. We need to qualify that. We are a potentially rich country. The natural resources we have make us only potentially rich. The most frustrating thing for any economist or manager of the economy is to see the macroeconomic indicators moving in the right direction and still hear people saying, as they are doing now, and rightly, that times are hard, that they can’t see the improvements in their pockets.

It is on one hand a commentary on the fact that we don’t have all the answers to many of the challenges we face in our development- which is why a dose of humility is needed among the protagonists in this enterprise called ‘development’ and what it will take to assure the long – term welfare of our growing population and their basic quest for food, decent housing and leisure – that we’re not growing at a high enough level, and that the growth is not employment generating.

 

TVM: So you’re saying the growth must lead to a good employment generation

Dr. Botchwey:  It must be transformational and employment generating and no transformation can ever take place except on a long term basis; it takes sustained effort and continuity in development policy.

 

TVM: There are some who’ve argued that government in government out, there seems to be some degree of political biasism when you talk about corruption. So the left is corrupt when the right is in power and then the right is corrupt when the left is in power and we don’t seem to be addressing it. What is your take on this and how can we attempt to deal with it?

Dr. Botchwey: Ah Biasism! I like that. I’ll take that to my lexicon of evolving Ghanaian inventions! The greatest harm that we can do to our country is to jeopardize or compromise the integrity, competence and independence of the key institutions for our democracy including those that are charged with fighting corruption.

When we compromise them by politicizing them, what happens is, we reduce the fight against corruption to just jailing people, especially political opponents through an interesting law on our statute books, a law of ‘strict liability’, more or less, tantalizingly called ‘causing financial loss’ in our popular parlance, which has become a ready-made hatchet that incumbent governments can and often do wield to prosecute their political agendas. That is not fighting corruption. The discourse on corruption is rather confusing.

Apart from the incidence of what you call political biasism which is unfortunate because it undermines the credibility of the fight against corruption and makes the populace cynical – they are not fooled –  except perhaps the growing legion of so –  called ‘party communicators’ who are fired by blind loyalty and other activists often masquerading as journalists!

We have institutions that are meant to address corruption including the Public Procurement Authority and statutes – the Public Procurement Act, Act 663 of 2003 and its subsequent amendments, that are meant to provide the legal framework for preventing and punishing corruption in public procurement where we know value for money considerations in large public investments can be compromised to the detriment of the nation.

The integrity of this legal framework so that it doesn’t get used selectively and worse, as a hatchet for intimidating political opposition, but to prevent, curtail and sanction violations, especially egregious violations that hurt the common good. It is as simple as that. And the fight and public discourse on corruption must also be broadened to include ‘petty corruption’ which is what the average person struggling to make a living confronts daily in getting paid public officials to do their duty, whether it be issuing driving licenses, or passports or clearing goods at the ports or registering title to land. Ever tried to register title to land? It is a monumental scandal!

 

TVM: To smoothen the process?

Dr. Botchwey: Yes ‘smoothening the process “is a convenient euphemism that soothes our senses and curbs our indignation. It must be abandoned in favor of the naked truth; it is bribery! So yes corruption is still a big issue, I think that we are making some progress in dealing with it but I fear there’s too much of what you call political biasism in the fight against corruption.

 

TVM: Let’s talk about Ghana beyond 62years. There are those who are pushing for us to change the dialogue or the discourse in the country, pushing for much more intellectual based discussion, changing the narrative. How can we see this pan out? How do we ensure that we are changing the dragging regressive politics of needles comparison? How do we change the entire narrative to make us more progressive?

Dr. Botchwey: it is a responsibility for all of us i.e. shared responsibility for all of us including the likes of you.

 

TVM: Who?

Dr. Botchwey:  Civil society. Unfortunately, journalists are just worsening the process. We’ve made tremendous progress in our journalism but it is often mired in the same political biasm even in reporting and conducting public debate.

 

TVM: How can we capitalize on the late start advantage to develop as a country? How do we get around that? What is the concept of the late start advantage?

Dr. Botchwey: It’s an interestingly question. We live in a globalized world. Enterprises are able to source and locate anywhere they have the best advantages but unfortunately it is a trend that is under threat now, with the eerie re-emergence of the same tensions that marked the inter-war years and a US led bilateralism which has put the world economy in rather uncharted waters unfortunately. Nevertheless we need to position ourselves to take advantage of globalization. We need to decide as a nation where our comparative advantage really lies in.

If we are going to leap frog- and we can, we must train our work force and equip them with the skill sets required in today’s world. Unfortunately, this is not quite happening. Although, we have a proliferation of universities now, there has been relatively little diversification in course offerings. If you ask any young man or woman who has finished secondary school and is looking to enter the University for a degree, what career they have in mind, the most likely response will be: HR, or Marketing. We cannot leap frog unless we harness the force of technology and technical innovation.

 

TVM: We need good skill sets?

Dr. Botchwey: Yes. To take advantage of globalization, we need that. We need planning as I mentioned earlier. Just study what China has done. Now, they are not just assembling things for the world, they are actually manufacturing things from the scratch and are spawning new products. They are going to space. They have just landed on the part of the moon that nobody has gone to before.

They are building their own aircraft carriers but above all, they have internalized those skills and have developed programs for developing even more skills. So in order to be able to take advantage of the late-start advantage, we can’t insulate ourselves from globalization. We must identify what we are good at and how do we prepare ourselves to deliver what we are good at? We sought to address these issues at the NDPC in the 40 Year Plan which is currently under review.

 

 

TVM: In your experience, in just some few seconds, if I ask you to pick two or three things that you think the Ghanaian is good at, as a collective, which should be an area of focus that we could dial up on, what would you pick?

Dr. Botchwey: Not easy. Broadly, labor intensive light manufacturing, and agricultural and horticultural products come to mind. Much work was done at the NDPC in the context of the preparation of the 40 year Plan which is currently under review.

 

PERSONALITY PROFILE

TVM: Many Ghanaians think of you as a man of deep insight. Quickly tell us about your growing up. How was your upbringing like?

Dr. Botchwey: People are very gracious to me, for the most part. I was born in Tamale. My dad was a civil servant and my mother a trader. I didn’t exactly grow up in the same environment with my mum. I went to school mostly in the North: Bawku, Yendi, and Wa. By the time we got back to the south from all these voyages, I could hardly speak any Akan. I mainly communicated in English and was often laughed at by my friends.

I won scholarships and went to PRESEC, St Augustine’s and so on and finally to Legon where I did my first degree. I won a scholarship to Oxford and just a day before I traveled to Oxford, I got admission also to Yale with a fatter scholarship so I ended up going to Yale. But in between, as I was reading my Masters degree something awakened in me a certain revolutionary fervor, a compelling yearning for social activism to do something about what I saw as pervasive injustice especially against the African person.

 

TVM: That’s where the passion started from?

Dr. Botchwey: It started from my days in America and saw its maturation in my days at the University of Dar es Salaam in Nyerere’s Tanzania, and my association with a cluster of progressive academics including Walter Rodney of ‘How Europe Underdeveloped Africa’ fame, Clive Thomas, John Saul, Reginald Green, Forster Carter, Dan Nabudere, Mahmoud Mamdani, Horace Campbell, among others.

 

TVM: What is your fondest childhood memory?

Dr. Botchwey:  Ah! you know? It had to be childhood liking for ‘boflot’, later to be replaced by koose and kurikuri! Going to school in Bawku, we would  walk past loads of it by the road side and far enough from the adjacent houses. We would slip one or two into our pockets and then call someone to come and sell us whatever our daily stipends (few pennies) could buy, and  I’ll tell myself, when I grew up, I would try to make lots of money so that I could eat all the boflot I wanted! Unknown to me, the lady boflot maker had noticed our pranks and reported me to doting mother who not only spared me the cane, but made boflot a steady part of my breakfast! To this day my food preferences if I can get them are Northern delicacies. I’ve long given up my craving for artery clogging Fante doughnuts!

 

TVM: Your journey from the young man who liked ‘boflot’, to a statesman and political economist today, was it born out of reading? Or was there a mentor?

Dr. Botchwey: Yes, it was born out of reading. At Yale, if you wanted to do a master’s degree in Law, you needed more than a passing acquaintance with political economy especially in the areas that I was interested in– Corporate Law Finance. But I acquired my revolutionary fervor, from reading Marx as we all did then.

 

TVM: So the Marxism was what drove you as a people’s person?

Dr. Botchwey: Absolutely!

 

TVM: Interesting. What struck you most about Karl Marx?

Dr. Botchwey: Well, his passion for fighting injustice in the work place for the downtrodden. It was right in the 19th century when injustice was at its worst; with child labor and dreadful working conditions in the mines, coal mines, and his determination to mobilize working people to participate in development and the fruits of development to change their lives. That really informed me and kept me reading mostly radical socialist literature.

 

TVM: In 1982, just fast forwarding to when President Jerry John Rawlings reached out to you to assist in stabilizing the Ghanaian economy. It is on record that you achieved some very strong results out there. What mechanisms do you remember deploying with your team to get the change that we saw?

Dr. Botchwey: Well, the most difficult one was to adjust the exchange rate. Let’s not forget, everybody who had tried it was overthrown. So we had to do it in mechanisms and language that people understood.

 

TVM: If you were in office today, and seeing what we’re seeing now in terms of cedi depreciation, the rise in public debt etc., would you have done the same? Or the antidote for now is different?

Dr. Botchwey: The situation now is different because we have a market determined exchange rate. We just need to make sure that our fiscal policies, our matching policies are sound so that we can have a stable macroeconomic environment.

 

TVM: You did talk about having a fiscal space but also having the political space. There are those who argue that you stormed out of the NDC in 1995 after you were overruled, so to speak on the plan for a spending splurge to win the 1996 election. Does that fall part of the political space that you were looking for? And what’s your take first on this allegation?

Dr. Botchwey: Idle speculation. Fake news, in today’s parlance.

 

TVM: There are those who argue that the Party needed you most during that period.

Dr. Botchwey: I didn’t think so. I had been in office for 13 years; I thought it was time to move on and return to the relative quietude and intellectual rigor of academic work.

 

TVM:  There is a quote attributed to you in the political window and it goes like this “If elected flagbearer, I would elaborate a clear plan to build on Ghana’s potential to take advantage of the global economy and the network of globally influential individuals and organization I have worked with to the benefit of the party and the people”. How could this have translated into the Ghana we wanted?

Dr. Botchwey: I had the good fortune of network on International Development when I was at Harvard and at the Fletcher School. I worked on the Millennium Development Goals, the UNDP’s Human Development Report  (HDR) and was a member of the UN Committee on Development Policy. So I had a good network and I was saying then when I was seeking flagbereship of the Party that I would reach out to people I knew in this network to help in fashioning the right policies if I were elected. In the event, I didn’t win.

 

TVM: There are those who say a strong team is important and I also believe that a strong leadership is important. So if you were the president, tell me two or three things that you will you do differently?

Dr. Botchwey: I am what you will call a yesterday’s man. My career reached its peak and has ended. I am humble enough to recognize that. I still have those networks. Hypothetically, if the good Lord should somehow change the laws of biology and return me to my 40s and I got elected as president, I would reach out to all talents and expertise of Ghanaians wherever they may be and whichever party they may belong to. I will end this bout of vengefulness and recrimination. I believe in inclusivity and ethicality in governance and temperance in the public discourse on matters that affect our common good. That is what would move the country forward. I think that is what presidents should do.

 

TVM: The 2020 flagbearership race of the NDC, did you intend to run for the flag-bearership?

Dr. Botchwey: No. If I did intend to, I would have run

 

TVM: The last flagbearership election and the aftermath of it, is it a reflection of what you saw going round?

Dr. Botchwey: To some extent, yes.

 

TVM: What does Kwesi do at his leisure time?

Dr. Botchwey: Reading and Jazz, especially smooth jazz.

 

TVM: Favorite sport and why?

Dr. Botchwey: Tennis, on clay courts when I can– they are gentler on the knees. Not golf. It is much too laid back for me. I reckon that what I can get from a game of tennis will take me two days of golf or something. My friends think the contrary.

 

TVM: If I put economic books aside, what others do you read?

Dr. Botchwey: Thrillers, crime and investigation– that’s series. It kind of tells me the working of the human mind. And cartoons.

 

TVM: Is it because you are inquisitive?

Dr. Botchwey: It is part but I like to understand how people’s minds work and the kind of mischief they are up to.

 

TVM: Will I be right in saying that the Dr. Kwesi Botchwey we are seeing today has been largely influenced by the Marxist theory or are there other books that may have influenced you?

Dr. Botchwey: Yes, it has defined my world outlook.  A lot of my friends laugh at me when I say that. They tell “You are Marxist but you wear nice clothes and nice things”. But I laugh it off. I have sort of gotten used to these taunts. But of course I have been influenced by philosophy generally, from the Greeks through the Enlightenment to E.O. Wilson’s work on Consilience, and, yes, the wisdom I learnt at my mother’s knee. Enough!

 

TVM: On Friday, if team Vaultz decides to organize an amazing meal for you, a delicacy, what should it be?

Dr. Botchwey: Interesting. For me, food is basically for restitution and livelihood so I don’t really have any favorite foods. No. That’s not true. I love French cuisine! But I’m a fish man. So if you decide to do any such thing, any old array, anything with fish would be just fine.

 

TVM: You have betrayed your ‘boflot’?

Dr. Botchwey:  Haha. You forget it got displaced long ago by kurikuri and koose long ago!

 

TVM: If you had the opportunity to rewrite a wrong. What would it be?

Dr. Botchwey: I’m sure I committed some wrongs in my long period of public service. Can’t remember any that stand out like a sore thumb. But there must be some – I have been all too human all my life – I will enthusiastically correct them if I am duly reminded.

 

TVM: On the Vaultz interview, we try and always have guests speak to their peers. The current minister of finance, Ken Ofori-Atta, what advice would you give him as somebody who sat in his chair before?

Dr. Botchwey: That’s an interesting one. Nothing really comes to mind. But, it will be nice if he could bring us all former finance ministers who are around, together sometime and have a chat and share a bottle of Barolo or Amarone!

 

TVM: What is your advice to the youth?

Dr. Botchwey: The youth are for me both worry and a tremendous source of inspiration. My heart bleeds when I see throngs of them roaming the streets trying to make a living. As a nation they represent our greatest asset and yet our greatest challenge. Their increasing anger and desperation should remind us that we are sitting on a time bomb. Providing them with the skills and training for to cope and flourish in a fast changing world, with advances in technology robotry and Artificial Intelligence that portend unimaginable changes human employment opportunities must be our topmost priority.

To the youth and especially to our young graduates, my advice is: don’t put your faith in government or public sector jobs all the time. There will never be enough to go round. Entrepreneurship and self- employment, doing anything or providing any service the market needs or wants can be an alternative. And finally, I do hope that the younger generations don’t repeat the ‘sins’ of the older generation and that they spawn a political culture that is less polarizing and partisan, more unifying. I do hope that we don’t see another generation that is just like us in that regard. It will be a huge tragedy for Ghana.

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