IMF, World Bank not to blame for Africa’s underdevelopment — Tony Oteng-Gyasi
The International Monetary Fund (IMF) and the World Bank can hand-hold Ghana and other African countries out of poverty into economic boom if the nations follow and implement the policy prescriptions of the Bretton Woods institutions diligently, an industrialist and former President of the Association of Ghana Industries (AGI), Tony Oteng-Gyasi, has said.
Mr Oteng-Gyasi said the general refrain in Ghana that “no country has developed under the watch of the IMF and World Bank” was “patently false”, referencing the economies of China and other so-called Asian Tigers as having first triumphed under the watch of the two international financial institutions.
Delivering the University of Ghana’s 2023 Alumni Lecture in Accra yesterday, the corporate governance expert said while other countries dutifully followed and implemented the recommendations of these institutions, pride and indiscipline made Ghana and other African countries to treat their advice half-heartedly, leading to the limited economic growth.
“Across Asia, these institutions have given advice and helped nations grow their economies remarkably well.
These institutions produced the Asian Tigers,” the former Chairman of the University of Ghana Council said.
“In Africa, we want to be Lions, but ignore the medicine the Asians took assiduously.
“From the free zones concept as part of the export promotion strategy, to the Gratis Technology centres as a foundation for industrial development, and regular tax policy advice, the World Bank and IMF have given good and useful policy advice to our nation,” he said at the event graced by past and continuing students, members of academia and the business community.
Mr Oteng-Gyasi became the 34th speaker and the second person from the private sector at the eminent speaker series instituted by the University of Ghana Alumni Association (UGAA) in 1974 for thought-provoking lectures on issues of national importance.
This year’s event, which coincided with the 75th anniversary of the university, was on the theme: “The Fault Dear Brutus…”
It was chaired by the university’s Vice-Chancellor, Prof. Nana Abba Appiah Amfo.
Mr Oteng-Gyasi’s intellectually stimulating lecture touched on economic development and policy formulations, public sector procurement and rent seeking, and natural resource endowment and their exploitations, among others.
The celebrated entrepreneur also blamed Ghana’s poor showing in manufacturing over the years on the lack of a realistic manufacturing promotion policy, the absence of value chains and easier ways of making money through importation.
The Chairman of the Board of the Ghana Revenue Authority recalled that while the International Finance Corporation struggled to find adequate bankable manufacturing projects to support in Ghana, many of the nation’s best and brightest found it easier to spend their energies on obtaining lucrative public contracts for imported goods and services rather than the hard work involved in setting up and growing manufacturing industries.
He said that was because the reward system was skewed towards importation, as national policies at the micro sector level did not support production.
“Instead, every policy, from insistence on exchange rate stability in the face of local inflation to the many legislated exemptions from import duty, undermines local production efforts.
“Even local content rules are allowed exemptions under the law.
In short order, the exemption becomes the norm,” he said.
Nation of traders
Mr Oteng-Gyasi also stated that the country’s poor record at enforcing laws such as those on import duty regimes and local content rules had given traders and importers a clear advantage over local producers.
That, he said, had created a nation of traders that had lost the quality and career-building manufacturing jobs that nurtured and grew middle-class families.
“We are rapidly becoming a society of a small affluent minority benefiting from economic rent, public procurement and trading monopolies, and a vast unemployed and underemployed majority stuck in low-skill and dead-end trading and service industry jobs.
“In the process, the politics of appeasement of this majority, with low prices and free social programmes because of their voting power, becomes the route to seeking power and retaining political power,” he said.
Turning his attention to illegal mining, popularly called galamsey, Mr Oteng-Gyasi said the menace indicated that the country had not learned from the damage illegal logging did to the nation.
He said the galamsey scourge reminded him eerily of the lost fight against illegal logging and the consequences that awaited the nation.
“I remember the then government’s fight against illegal logging to the extent that sales and distribution of chainsaws were monitored and controlled.
But people found ways around government policy by smuggling in chainsaws through our land borders.
“We were like a people determined, despite the best efforts of our government, to destroy our timber resources for a pittance.
As a result, choice timber species like Afromosia, Odum, Asanfona and the famous Mahogany were exploited into extinction,” he said.
“The Mercedes Benz vehicles they sold our timber logs to purchase are long broken down.
Meanwhile, we face massive reforestation bills.
“This example of our timber industry is an indication of where our illegal mining recklessness could lead our nation to,” Mr Oteng-Gyasi warned.