On Ghana’s one district, one factory plan

An ambitious effort to industrialise all parts of Ghana is recording slow but steady progress as the government reported the near-completion of 36 out of 51 factories promised as the government clocked two years in office. President Nana Akuffo-Addo and his New Patriotic Party came to office in 2016 with a campaign theme that resonated in Ghana and across Africa. He promised to plant in cooperation with the private sector one factory in each of the country’s 216 districts over the four-year tenure of the administration. We commend the progress, even as it falls short of the plan.
One District One Factory aims to stimulate industrialisation in all parts of Ghana through value-added agriculture and exploitation of the country’s natural resources. The first factory opened in 2017 in Ekumfi District. The Ekumfi Fruits and Juices Company Limited employs 250 people and processes 25, 600 tonnes of fruits per annum. It taps into the comparative advantage of the region.
While commissioning the Ekumfi Factory, Akufo-Addo promised that each of the country’s 216 districts would get a factory within the first four years of his government. He promised the first batch of 51 districts. The budget for the project is a handsome $465million.
The One District One Factory (1D1F) programme aims to establish a minimum of one factory in the 216 districts of the country. The goal is to create economic growth poles that would accelerate the development of those areas and create jobs for the growing number of young people. It seeks to transform the structural bases of the Ghanaian economy from dependency on production and export of raw materials to value-added industrialisation.
President Akuffo-Addo rightly decried the dependency on the export of raw materials that hitherto characterised industrialisation in Ghana. The 1D1F programme follows best practice principles of driving linkages to agriculture and natural resources of the country. It is bottom-up as it commences from the regions. It is also in collaboration with the private sector.
Adding value to primary products such as cocoa, gold and timber would involve the grassroots directly. Ghana already recorded success in adding value to cocoa, moving two steps up in the global ladder of cocoa producers as a result. “We cannot create the necessary numbers of high-paying jobs that will enhance the living standards ofthe mass of our people if we continue to maintain the economic structures that are dependent on the production and export of raw materials. Raw material producing economies do not create prosperity for the masses”, Akufo-Addo observed.
President Akuffo-Addo stated in 2017: “All I ask is for God’s wisdom, guidance and strength, and, I assure you that by the end of my first term in office, each district would have a factory. 51 out of 216 in my first year indicates that even before my first four years are over, each district would have its own factory.”
He gave the assurances as he toured various regions of the country. More importantly for the citizens of Ghana, the president declared: “Whether you voted for me or not, whether you supported me or not, I am going to be President for all, and I am going to work with every one of you. As President, I need the support of all the Chiefs and traditional rulers across the country. This is the only way by which we can develop all parts of the country, and bring prosperity to all.”
The outlined path to industrialisation in Ghana is inclusive. There is no division of the country into supporters and antagonists, or the infamous 97% versus 5%. It builds on a foundation of incentivisation and collaboration with the private sector. The elements include reduced or minimal tariffs, reduced taxation and elimination of duties on imports of raw materials.
In particular, the country seeks to incentivise Small and Medium Scale firms. It reduced Value Added Tax for such firms from 17.5% to 3% for SME goods and services. Direct stimulus using tried and tested fiscal approaches.
There is more ambition as Ghana recently also embarked on free education at Senior Secondary School levels. One direct outcome of the policy is increased enrolment and better access. Education and industrialisation are two critical paths for African economies.
Also recently, Volkswagen AG announced that it would build a vehicle assembling plant for the West African market in Ghana. Volkswagen had a plant in Nigeria, built in 1975. It withdrew in the late 1980s following repeated policy somersaults and the collapse of the Nigerian economy.
The positive news from Ghana is ennobling. It is worth monitoring as the country grapples with the realities of an ambitious “Ghana Beyond Aid” project that seeks to free the country from dependence on foreign aid. It is worthwhile to note that Ghana is embarking on the programmes in the wake of its emergence as an oil producing and exporting nation. We wish the Republic of Ghana progress on all fronts.