[ 2021-02-25 ]

Time to indigenise economy – Sir Sam
A business executive and statesman, Sir Sam E.
Jonah, has called for deliberate policies and
state intervention to increase indigenous
ownership of the economy.
He said there was the need for a national strategy
on economic empowerment to strengthen local
businesses and entrepreneurs to operate successful
enterprises that would play significant roles in
national development.

Sir Sam told the Graphic Business that the current
structure of the economy in which almost every
critical sector was largely controlled by foreign
entities was risky for the long-term sustenance of
the economy.

He said it was sad that from the banking sector
through extractive and telecommunications to
hospitality, virtually no Ghanaian individual or
institution had a substantial ownership of any of
the key firms in those sectors of the economy.

“The need to champion such policies is even more
urgent now with the establishment of the African
Continental Free Trade Area (AfCFTA) because the
initiative headquartered in Ghana can only retain
public support if indigenous entrepreneurs benefit
from the sacrifice of sovereignty and import
barriers that the initiative entails,” Sir Sam
said.



Read: COVID-19 challenges: Sam Jonah calls for
national dialogue

Impact on cedi

The interview discussed the need for a national
dialogue to explore solutions to the challenges of
the COVID-19 pandemic, how to preserve the
integrity of the three arms of government and a
call for constitutional reforms in response to
emerging challenges.

On the economy, Sir Sam, who is also the
Chancellor of the University of Cape Coast (UCC),
said: “Ghanaians do not own this economy and
that is not good for us.”

“Are we, therefore, surprised that our exchange
rate is the way it is?” he asked.

“On Mondays, when the significant investors in
the economy do the sweeps of all the money that
they have made from us and repatriate them, then
the cedi feels the pressure,” he said.

Read: Pay civil servants as politicians — Sam
Jonah


1D1F

He said while he expected the government’s One
District One Factory (1D1F) policy to assist in
addressing some of these imbalances, such
interventions would achieve little “without
strategic funding mechanisms to support local
enterprises.”

“Without that we will only be replacing foreign
imports with 'foreign goods' produced in Ghana
with minimal local contribution in the form of
employment and local inputs," he said.

He said such a development would create a similar
net outflow of hard currency whenever these
foreign-owned companies repatriated their profits
out of the country.


Way forward

The retired business executive also bemoaned the
granting of tax waivers and exemptions to foreign
investors to set up businesses in the country
without similar incentives in the form of grants
or start-up capital for local entrepreneurs.

He explained that the practice was a disservice to
indigenous entrepreneurship as it disadvantaged
the indigenes from a fair competition in their own
country.

Sir Sam said while foreign investments were good,
they needed to be balanced against the need to
develop domestic capacity and entrepreneurship to
help create the needed balance to serve as a
cushion against vulnerabilities and capital
flights.


Protectionism policies

"In fact, the best ambassadors for our local
economy will be strong local entrepreneurs with
viable businesses who could seek partnerships with
strategic foreign investors for growth capital and
foreign expertise in the form of skills transfer
programmes to benefit our economy,” Sir Sam
said.

“In various sectors of the economy, including
agriculture, retail and infrastructure, the lack
of strong local players was a disincentive to
meaningful foreign investment because investors
typically seek local partners who have some scale
and experience in the markets they seek to invest
in,” he said.

"Successful local entrepreneurs offer the most
attractive testimonial to foreign investors," he
added.

Sir Sam, therefore, advised the government to put
in place strategic measures, protectionist
policies and incentives for local entrepreneurs to
increase indigenous ownership of the economy
similar to what pertained in South Africa and
Nigeria.

He said such policies must be nationalistic and
not partisan to help create intergenerational
entrepreneurs and investors that could contribute
meaningfully to economic development.

Source - Graphic Online

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