Govt mobilises GH¢2.3bn for 1D1F - Alan Kyerematen
The government has, through the implementation of the One-District-One-Factory (1D1F) programme, mobilised a total of GH¢2.3 billion from local financial institutions to support the implementation of the flagship programme.
The Minister designate for Trade and Industry, Mr Alan Kyerematen, who made this known, said as part of the avowed commitment to ensure the successful implementation of the programme, the government had also provided interest subsidy support of GH¢213 million meant to de-risk the projects for the banks that were offering support to companies under the programme.
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“The interest subsidy makes it easier for the banks to become more profitable. In addition to that, GH¢603 million import duty exemptions have been granted to 37 1D1F companies,” he stated.
Doorstep industries
Taking his turn before the Appointments Committee yesterday, Mr Kyerematen said currently, the initiative was helping to bring industries to the doorstep of ordinary people, a reason the government was aggressively pursuing the programme.
“Currently, there are a total of 232 1D1F projects that are at various stages of implementation. Out of the 232 companies, only 64 are existing companies and 168 are new companies,” he stated.
Vetting
Mr Kyerematen spent over three hours answering questions bordering on trade liberalisation, continental free trade, how to tackle unemployment, termination of GCNet agreement, encroachment on Ejisu Free Zones land, invasion of retail business by foreigners, demolishing of companies at Ghana Trader Fair sites, Customs (Amendment) Act, Ghana’s policy on green industry, use of EXIM bank resources to support industry, automobile development policy, among others.
Job creation
The Minister designate for Trade and Industry said the 1D1F factory initiative was one of the most revolutionary interventions to have been introduced in Ghana since independence.
He said projects that were currently operating as 1D1F were 76, projects under construction 107 and projects that were ready to commence construction within the first half of this year were 49.
He stated that so far, out of the 232 projects, 56 per cent were agro-processing projects, 22 per cent general manufacturing, five per cent meat processing, farm agriculture four per cent, and 13 per cent constituting other industrial enterprises.
“Through the interventions of the 1D1F, 139, 331 direct and indirect jobs have been created by the 76 companies that are already operational, 285,915 additional direct and indirect jobs are projected from the projects that are under construction.
He, however, could not provide a regional breakdown of where these factories were located and promised to furnish the committee with the details in due course.
Industrial transformation
In the view of the nominee, the major problem that had confronted the country for centuries was the importation of a number of products which could be produced locally.
For instance, he said Ghana currently imported close to $1 billion three commodities—sugar, rice and poultry— annually, for which the country had the local capacity to do import substitution and produce.
He said it was for this reason that the government had embarked on a comprehensive programme for industrial transformation, which was anchored on ensuring that Ghana produced for export and for the purposes of import substitution.
“So, we have very comprehensive transformational interventions to build the capacity of local businesses to be able to import substitute and also produce those products for exports through 1D1F,” he said.
Continental free trade
On the question of what he would do as a minister to increase the competitiveness of Ghanaian entrepreneurs to match with counterparts in Nigeria and others from the sub-region that were breaking into the Ghanaian market, the nominee said Ghana had been ahead of the coming into force of the African Continental Free Trade Area (AfCFTA).
He said the government had introduced diverse initiatives to enhance the capacity of local businesses, preparing them to export not only to ECOWAS member states but to the wider African market.
“The 1D1F is a major intervention that will enable our companies to be able to produce to meet the requirements of AfCFTA,” he said.
Beyond 1D1F, he said the government had also initiated a national programme of action to identify different categories of Ghanaian companies that would be supported to take advantage of the AfCFTA.
“One category are companies that are already exporting to Africa. There is another category of companies that are exporting currently but not necessarily to Africa. All we are doing is to make sure that we enhance their capacity to sell more.
“We are also helping them to identify specific products that they can now produce and export to African markets and also new companies that we can incubate specifically to target Africa,” he said.
Growing unemployment
Mr Kyerematen agreed with the committee that currently beyond Accra and Kumasi, there was little evidence of industrial activity and outlined how he intended to change that to boost job creation and employment.
He said it was for that reason the government launched the comprehensive national industrial transformation programme to decentralise industrial development through 1D1F.
“We have also embarked on a programme to support micro and small enterprises (SMEs) and we have established 67 business resource centres that will cover all the districts in Ghana.”
“Thirty-seven of the business centres are already operational and the other 30 will be completed by the middle of this year. The centres are one-stop support centres that are supposed to deliver business development services to SMEs throughout the country so that they will create jobs for the people,” he said.
Termination of GCNet agreement
Touching on the termination of the Ghana Community Network System (GCNet) agreement, Mr Kyerematen told the committee that the cancellation of the agreement would not result in judgement debt against Ghana.
He said a look at Ghana’s trade space over the past four decades since import licences were abolished in the 1970s, the country’s import and export space had been characterised by multiplicity of service providers.
He said there were so many companies providing different types of services not fully integrated and coordinated with each other.
To address the challenge, he said he took the decision to put in place a comprehensive integrated facilitation system that effectively offered diverse services for imports and exports, enhanced revenue mobilisation and deepened security arrangements for agro exports and imports.
Increase in revenue mobilisation
Through the public procurement process, the nominee said the government selected a local company that was working together with the Korean Customs Service to deploy a new technology called integrated customs management system (Unipass), which was deployed in June 2020.
He stated the deployment of the new technology helped Ghana to realise additional GH¢1.6 billion revenue within six months from July to December, 2020
“The statistics now is clear about the value of new intervention. After the first month of deployment in July there was an increase of 23 per cent over 2019. In August, there was 31 per cent increase, in September 34 per cent, in October 34 per cent, in November 25 per cent and in December 19 per cent.
“So Mr Chairman, how is it that a system that has been described in negative terms could upon deployment immediately increase our revenue mobilisation. This has never happened in Ghana before,” he said.