Interview: Hayssam Fakhry
What are your expectations for the industrial sector during Ghana’s post-pandemic recovery phase?
HAYSSAM FAKHRY: While the Covid-19 pandemic has certainly been negative in terms of human health, there were some positive outcomes from the business perspective. The onset of the crisis was a wake-up call for Ghana, as it highlighted the lack of local product variety. The country had been relying too heavily on imports, whether from neighbouring nations or further abroad.
Due to the supply chain disruptions that accompanied the pandemic, local industry has had an opportunity to fill supply gaps as businesses sought to secure locally available alternatives for products and materials they had previously imported. In the face of reduced imports, people are choosing locally manufactured goods based on their quality.
At the same time, the pandemic has limited the ability of people who used to travel and spend money abroad to do so, creating local investment opportunities and increased demand for local goods. This could be the beginning of a longer-term trend with the right government support. The private sector is ideally suited to create jobs, so fostering investment in private sector manufacturing to supply local demand will drive sustainable employment growth as well, although some help is needed from the government in terms of policy.
Which policies would have the greatest impact in terms of improving the business and investment environment in Ghana?
FAKHRY: The infrastructure companies rely on is the foundation of a healthy business environment. For industry and manufacturing, access to affordable and reliable electricity is key. Electricity costs in Ghana currently exceed those in each of our neighbouring countries – and, for many businesses, surpass payroll expenses. This puts manufacturers in Ghana at a competitive disadvantage as they have to account not only for the higher price of electricity, but also the knock-on costs like replacing or repairing machines and computers damaged by unreliable and erratic power.
Natural gas is a potential alternative that is generating a lot of interest among manufacturers in the country. By building private power plants to supply their needs, companies expect to become more competitive as their efficiency improves. This trend remains in the early stages, but unless significant improvements are made to the country’s power infrastructure, it is likely that autonomous power generation will become the norm in Ghanaian industry.
How do you judge Ghana’s potential as a regional centre for manufacturing and exports?
FAKHRY: Ghana’s geographic position within West Africa is ideal, and being an English-speaking country makes it more attractive to a range of global investors. The fact that it is considered a good place to live makes it easier to open an office and attract talent as well.
The African Continental Free Trade Area (AfCFTA), for its part, looks very good on paper, with clear economic and trade benefits. The success or failure of the bloc rests on implementation, however. If implemented properly, I think Africa will benefit significantly from this agreement in the long term, but given the difficulties faced in implementing other trade agreements, it is likely that various countries will seek to benefit from implementation where they can in the short term, and resist implementation in instances where it is perceived to usher in too much competition.
Technology – which is having a significant impact on the manufacturing industry through digitalisation, automation and smart solutions – may also prove a useful means of effectively and fairly implementing the AfCFTA. Digitalisation has simplified industrial processes substantially, and it may do the same when it comes to Customs forms and other aspects that are central to effective cross-border trade, but only if there is the accompanying political will of governments.
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