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One District One Factory policy, and the implications for job creation

March 21, 2020

On Friday, the 25th of August, 2017, the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo launched the government’s flagship programme dubbed “One District One Factory” at Ekumfi in the Central Region.

The launch marked the formal introduction and implementation of the government’s industrialisation policy.

The
fruit processing factory at Ekumfi is expected to create ready market for
pineapples cultivated in the Ekumfi area and its suburbs.

Currently,
the factory processes pineapples into fruit juice and other finished products
for both local and international markets.

Objectives

Some
underlying objectives of the government’s one district, one factory flagship
programme are to ensure equitable distribution of factories across the country;
create strong link among industry, agriculture and other natural resources;
ensure rapid industrialisation; reduce importation considerably; create job
opportunities; ensure local currency stability relative to foreign major
currencies such as the American dollar, European euro, and British pound
sterling; and to enhance wealth creation among individuals and businesses in
the Ghanaian economy.

In
addition, the programme seeks to ensure equitable distribution of factories
across the length and breadth of the country; and to ensure fairly equitable
distribution of Ghana’s population across the various districts,
municipalities, metropolitan areas, and regions. Finally, the programme is
expected to engender internal migration to facilitate realisation of the latter
objective.  

Investments and Production Capacity

Successful
implementation of the flagship programme in all the 216 districts across the
country is estimated to cost US$10 billion.

About
$5 million of the recent $2 billion Exim Bank Chinese loan contracted by the
Government of Ghana was expected to be invested in the Ekumfi Fruit Processing
Factory with full repayment expected to be made by the latter in seven years.

It
is refreshing to note the fruit processing factory at Ekumfi has an initial
production capacity of about 80 tonnes per day; and expected to produce about
25,600 tonnes of fruit per year.

This
translates into 320 estimated productive days (25,600 tonnes per year ÷ 80
tonnes per day = 320 days) throughout the year; and an estimated manufacturing
capacity of 480 tonnes (80 tonnes x 6 days = 480 tonnes) per week.

Job Opportunities

The
Ekumfi fruit processing factory is expected to create direct employment for 250
persons; and create additional 5,000 direct and indirect jobs in the district.
Suppose an average of 250 persons is to be hired in each of the 216 districts
across the country.

We
could expect employment opportunities for about 54,000 people (250 people x 216
districts = 54,000 people).

Should
an average of 5,000 direct and indirect jobs be recorded following the establishment
of factories throughout the 216 districts, one could count about 1,080,000 direct
and indirect jobs (216 districts x 5,000 direct & indirect jobs = 1,080,000
jobs) across the country.

Each
of these 1,080,000 direct and indirect jobs would come along with employment
opportunities.

Available
data from the Ministry of Trade and Industry revealed as at November 2019, the
one district, one factory initiative has resulted in the establishment of
fifty-eight (58) factories; twenty-six (26) were at various stages of
completion while the construction of ninety-seven (97) were to commence towards
the end of 2019.

The
58 established factories created about 10,983 direct jobs and 43,900 indirect
jobs respectively.

Undoubtedly,
the programme remains the panacea to the country’s unemployment challenges; the
programme is expected to create significant number of jobs and contribute
meaningfully to the rapid development of rural communities, towns and urban
areas while curbing the socio-economic harmful effects of outbreaks such as the
Severe Acute Respiratory Syndrome (SARS), Ebola, and Coronavirus or COVID-19 on
the Ghanaian economy.

According
to the Ghana Union of Traders Association (GUTA), total goods manufactured in
Ghana and in the West African Sub-region do not match up to five per cent (5%)
of total import demands by Ghanaian traders.

This
is indicative of the existence of a yawning gap between locally-manufactured
goods and total market demand in the Ghanaian economy.

Prioritizing
Ghana’s industrialization initiative would help ensure the immediate establishment
of factories essential to the manufacturing of goods that are frequently and
regularly imported into the country in large commercial quantities and monetary
values.

Conclusion

The industrialisation drive under President
Nana Akufo-Addo’s administration could be described aptly as reincarnation and
continuum of the industrialisation policy introduced and implemented during the
first Republic under the leadership of the late Osagyefo Dr. Kwame Nkrumah.

However, global industrialisation has
undergone a series of revolution with the fourth and most recent known as the digital
revolution
.

Under the digital revolution, existing lines
among biological, digital, and physical spheres are blurred to meet increasing
socio-economic demands of people in various economies across the globe.

The writer believes managers of the one
district, one factory flagship programme would be guided by the exceptional
industrialisation exploits of economies such as China, United States of
America, Germany, Russia, Japan, Great Britain, South Korea, and others, to
guarantee the progamme’s economic viability and success.

The current programme deserves the financial,
intellectual, spiritual, social, and moral backing of all well-meaning
Ghanaians, external well-wishers, investors and non-investors alike, to affirm
its resounding economic success and sustainability while contributing
significantly to job creation and employment.

Indeed, COVID-19 affirms the need for an
expedited action on the industrialization drive to ensure import-substitution
factories are established in strategic parts of the country to reduce the
volume of total imports; and to minimize the negative impact of external
factors such as supply relative to demand, and prices of goods in the world
market; and outbreak of pandemics on the economic fortunes of the country.  

By Ebenezer M. Ashley (PhD).

Fellow
Chartered Economist &

CEO
of EBEN Consultancy

Email: ebenezer.ashley@gmail.com

The post One District One Factory policy, and the implications for job creation appeared first on Ghana Talks Business.

Ghana Talks Business

Source : African Media Agency (AMA)

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