Ghana Industrial Sector: Association of Ghana Industries

Interview with Nana Owusu-Afari, President of AGI (Association of Ghana Industries)

Let’s start by introducing AGI, the Association of Ghana Industries.

AGI was set up as an Advocacy Association to support industry, especially the manufacturing sector, to be able to dialogue with government policy makers; to prepare the ground and the climate for very good manufacturing enterprises to thrive, to make profits, to employ a lot of workers so that the government can also levy sufficient taxation to run the economy. Since its establishment, the Association has always been working with the government, advocating the creation of excellent policies. The government calls on us when it is about to initiate policies that affect industry and invites us to give our input. In fact, every year when they are preparing the budget, the Minister of Finance & Economic Planning invites AGI to contribute for our sector and to put forward how we want the budget to be presented, or to raise any concerns in the industry that we want the budget to address. And we do that. AGI represents all the sectors of industry in this country, from agri-business, automotive, chemicals, plastics, ICT, engineering, construction, whatever. And briefly, this is what we are doing. The total membership is about 1,200 companies – AGI’s membership is for companies not individual persons – so that is what we are doing here. The last sector to be added was the oil and gas sector.

So the oil and gas sector was added because of its new importance?

It came as the last sector because Ghana successfully hit oil in commercial quantities in 2007. There is therefore a lot of activity in oil drilling, marketing and so on. Ghanaians are now beginning to go into that sector to supply a lot of requirements. The sector has therefore become very important, and as a very important sector, we need to watch it develop; so we are helping the Government to formulate policies with special reference to the local content policies, which will enable Ghanaian businessmen to have access to some of the supply chain in the oil and gas sector as well.

How would you define industry in Ghana, in relation to the other sectors, and what are the strengths of the industry regarding exports?

Industry in Ghana has had quite a chequered history. At the beginning, Ghana’s policy was socialist. We only decided to really open it up and let the private sector thrive instead of the public sector one or two decades ago. So the private sector is now driving industrial growth in this country. Of course, we cannot do it alone – we have to do it with government support. This is what is happening now. And we think that, as a developing country, we are really moving forward in developing industry, because it is industry that will help with employment generation, and with employment we are creating work, and with work the government will also get taxes to put back into infrastructure development for the whole economy.

But Ghana has been better than other countries in terms of industry?

Well, I think when you look at the ECOWAS sub-region of West Africa – about 15 countries have formed the Economic Community of West African States, which we call ECOWAS – I think Ghana is one of the leading countries in terms of manufacturing. We have done quite well in terms of manufacturing and that is why you have associations like this, which is purely a private sector association, with no government-funded activities.

What are the gaps in the industry sector where there are opportunities for investors to come and help the economy in Ghana? And how would these opportunities also benefit investors?

Well, there are quite a lot of opportunities for foreign investors. In fact, there has been quite a lot of drive to invite foreign direct investments into the economy. We have a lot of infrastructure deficits in terms of roads, in terms of developing airports, seaports, communications and railways in particular. Now, moving away from that sector, we come to manufacturing activities and there are also a lot of opportunities here. Over 80% of members’ profiles in AGI are in the small and medium-sized enterprises category. We are here to build really big companies – a lot of the big companies who are members of AGI are multi-national: Unilever, Nestlé or Ghacem, a big cement manufacturer, for example. They are all members but a lot of them who are the biggest companies operating in the country are multi-nationals. We also have to develop the Ghanaian and African capacity to be able to build other sectors, to become as big as the multi-nationals are now.

What are the largest Ghanaian industry companies?

Well, to see that we would have to go through the sectors and pick Ghanaians who have done very well in their various sectors. We have relatively big Ghanaian companies in electric cable manufacturing, textiles and garments, hotels and hospitality and pharmaceuticals. However, in terms of comparing Ghanaian companies to the multi-nationals, very few Ghanaian companies can come up to their level. We have the Cocoa Processing Company, for instance, where a lot of interest has come in mostly from multi-nationals. When you look at the mining sector, Ghana has been a big producer of gold for over 100 years and the majority of the gold mines are owned by foreign companies and corporations – AngloGold Ashanti, is number one in that respect. Then recently we had the oil find and we had the international companies coming in to do the drilling and extracting of the hydrocarbons from the seabed. As of now, we only have oil off-shore but we hear there are quite a lot of opportunities for exploration inland, or on-shore, as well. So there are a lot of opportunities. However, Ghanaian companies per se have not developed their capacities to really reach the levels of the international companies. We are therefore looking at partnerships between Ghanaian companies and the multi-nationals. This is where we have got the government to introduce the local content bill, which is being discussed now, so that foreign investors who come to Ghana will have to partner Ghanaians to build Ghanaians up to capacity so that we can also benefit from the resources. This is important because the resources that are in this country are owned by Ghanaians and Ghanaians must therefore also take part in their extraction. And any resource and benefits derived from this should also benefit Ghanaians.

In which sector do you think this is most needed? Where do you really need to have government help and, more than that, partnerships?

In fact, we are looking at the local contents law to apply to all sectors of the Ghanaian economy, because as a developing country we are facing a lot of challenges. We have a lot of technological challenges, as a lot of the machinery that is released over there is not available here, so we have to build our capacity, do research and much more. We need the foreign investors to team up with us so that we can take advantage of what is happening elsewhere and bring it into our country.

You mentioned some challenges. What do you think are the main challenges for industries that want to come to Ghana? Is it easy?

Yes, it is easy, but there are also a whole lot of challenges. One is that over the past year or so, we have realised that we have serious deficits in energy – energy generation, electricity supply for industries. Water supply is also very serious. And then we have infrastructure challenges as well. Roads are not connecting throughout the whole country. We need to develop the major highways running from north to south and east to west; then we have to develop the feeder roads and the urban roads to facilitate transport and make it easy to move from one place to another. This should not take you more than one hour or so in a city like Accra but sometimes it can take you up to two or three hours as a result of regular traffic build-up; so we need a lot of access roads.

We also need to improve our education system. We are doing quite well, but there is still a large proportion of our students leaving university without the necessary skills. The government is therefore currently developing skills and entrepreneurship in training, so that graduates can come out and start doing things that they will love to do rather than just coming out and going through the offices looking for white collar jobs. That does not help any more. We want graduates who can really develop their skills so that they can enter into industry – or the very innovative can join the creative arts and so forth. We need to develop our education in that area.

When we look at the country, it has gone through some amazing development and has a great growth rate. There is also a strong student base with a lot of students graduating. However, there is a lot of unemployment among the youth. So there’s something missing here: a lot of students are graduating and there is a lot of growth, but the students don’t have the skills; they haven’t had a proper education.

Our education needs to be well-structured in such a way that we place a premium on skills development. Technical skills development is extremely important if we are to really make it, because it is the middle-level manpower with well-developed skills that will build the economy. It is not people with PhDs and Masters, because they do research; they are lecturers, and I am not saying they are not good – it is good to have PhDs and Masters and so forth – but the majority of graduates that are coming out should have skills that allows them to be employed in industry immediately. We have been advising the government about the role of industry in connecting with education so that the pupils and students can have training. By the time they leave, they should have acquired the necessary skills to really go into industry straight in three or four years’ time. However, what is happening right now is that a lot of people are going in for certificates – MBAs and so forth. And for me, those are useful but they are not really necessary for industrial improvement. They are very useful at the higher level, but how many directors do you need in a company? Only about three, four, five, six directors. The majority are the middle-level.

What about what your personal challenges as the President of AGI?

The personal challenge of a President of an association like AGI is that I want to translate the ambition and vision of my members to the government. I want the government to understand. And yes, these people are all in partnership with us. If we develop them, we develop the economy; if we support them, we are supporting the economy. That is the major challenge. Fortunately, the government is listening to us now. There is a lot of rapport between the private sector and the government. In fact, we have instituted regular meetings with the Presidency, where we go and tell them what we feel should be done, because it is one thing sitting in your office developing the policy and another thing to be working. You can develop a good policy for farming, but you must consult the farmer to know exactly what he needs. So we are on the ground and the government always has to consult us when they are developing policies, because policies that can help us all to grow is what the government needs, and also what we need.

So you talk directly with the Presidency. You also talk to the Minister of…

We have a Minister for Private Sector Development. The government has appointed a Minister specifically for the private sector, so we have meetings with this Minister and tell him what we think he should look at if he wants to develop the private sector.

What is your message to the international community regarding industry in Ghana?

Well, I can say to the international community and those who want to come to Ghana to invest that Ghana is booming for investment. The message is that when they come, they should link up with people who know which areas they want to go. And the Association of Ghana Industries is there to support foreigners who come in to look for investment opportunities; we will advise you. We also have the Ghana Investment Promotion Centre, where you can find information on all the incentives, all the laws and everything about investing in Ghana. However, once you have done your registration and got all your company information and everything set up, it is the Association of Ghana Industries that you will come to to get a feel of the industry, and then join us and we will help you. Further down the line, apart from all the legalities that you have concluded, you may meet challenges where you will need an association like us to come and resolve them for you.

And you have some services you can provide to them?

Sure! People come to us when they have been overcharged in duty, and we provide support for a whole lot of other things as well. We have relationships with Customs, the Ghana Revenue Authority, the universities and the research institutions. We have a relationship with all of them. So if you come here and need to go to any area, the Association of Ghana Industries can support you and open the way for you.