A recent McKinsey & Company report, LIONS ON THE MOVE II: REALIZING THE POTENTIAL OF AFRICA’S ECONOMIES (www.mckinsey.com/mgi), outlines the potential for Africa’s economies and what needs to be done to ensure the potential is met. It outlines what governments need to do in order to ensure they capitalize on the opportunities ahead.
They point out that there are six key priorities for Government:
1. Aggressively diversify the economy – needs a long-term national vision with transparent objectives!
2. Accelerate infrastructure development – electricity and transportation
3. Deepen regional integration – ECOWAS, lower tariffs and taxation and border entry make commerce easier
4. Create tomorrow’s talent – “Africa-based companies have reported major challenges in attracting and retaining the talent they need to run and grow their businesses.” – greater investment in schools and vocational training is needed to build relevant skills
5. Ensure healthy urbanisation – affordable housing, mass transit systems, access to electricity, clean water, sewerage removal, health care, communication technology
6. Mobilise domestic resources – localised funding and wealth generation instruments – pension and investment funds, public private partnerships
A careful assessment of the Pre-Mahama, the NDC’s current policies and those outlined in the manifesto align and reflect these requirements indicating that they are on the right track.
The McKinsey scorecard of the NDC’s performance in office and its aspirations as elaborated in its manifesto yielded the following results:
1. Aggressively diversify the economy – Since the NDC government declared its commitment to being the Food Basket, Education Centre, Power and
Healthcare provider to the Region. It has been actively creating the environment for FDI and manufacturers to set up in Ghana – tick
2. Accelerate infrastructure development – Roads, interchanges, rail links, port expansions, irrigation systems, airports, fibre optics, housing, hospitals, clinics, schools – have been built and will continue to be built to accelerate infrastructure development. – tick
3. Deepen regional integration – the ECOWAS treaty opens up the regional market to 130 million people and Ghana is well place to take advantage of this with its current and projected strong economic fundamentals and initiatives as highlighted in the point 1.
4. Create tomorrow’s talent – With a young population and taking cognisance of the fact that education is the key to a brighter future, the NDC built JHS school buildings and changed schools under trees and is now building SHS school buildings, Tertiary education facilities and opening up e-learning so the country can nurture the best and brightest talent in Ghana –
5. Ensure healthy urbanisation –The NDC has built and continue to build hospitals, roads, schools and houses for Ghana. It has not relented in providing clean drinking water, electricity to communities and public transport to the teeming masses of Ghanaians.
6. Mobilise domestic resources – The NDC government has entered into PPP agreements with the likes of GE to provide power going forward amongst its many other PPP’s for infrastructure development. The aim is to ensure that resources needed to catapult the country into a fledgling middle income economy is made available. – tick
Further in the report and examining Africa’s prospects, by 2025 total consumption is likely to reach $5.6 Trillion and by 2034 Africa will have the largest working population in the world. In the next 30 years 187 million more people are expected to be living in cities! In Ghana 38% of the population is under the age of 14 which means that those 10.5 million people need to be educated and kept healthy so that they can be a productive workforce able to earn well for themselves and their families
The report presented highlights of what additional initiatives need to be undertaken to ensure that Ghana is able to capitalise on the opportunities Africa presents:
1. Communications – 50% of people in Africa will have SMART phones by 2020 so Ghana should be licensing the next level of 4G and LTE networks now along with the installation of fibre and data centres, and legislation around security and privacy in data communications. These are all currently being done with some almost completed.
2. Resources – Africa has 6-% of the unutilized crop land. The NDC government has opened up over 300,000 hectares of farm land and irrigated over 1,600 hectares. It also plans to continue to upgrade infrastructure in the mining regions e.g. communities that have ongoing oil and gas projects.
3. Make it easier to register new business – rules are changing and with all the right information a business can be up and running in a matter of days and this is an initiative that government must continue to work on.
4. Incentivise FDI and manufacturing though advantageous tariffs and taxes – The NDC promises to do this in key areas around import substitution so that the country produces what it consumes rather than import.
It is therefore undeniable that with these NDC government initiatives the country is far ahead of regional competitors and will continue to create an environment where businesses and Ghanaians can be successful as expected of Government.
The NDC is therefore doing the rights things and it has the right set of plans in place for the future as elaborated in the report.