- The economic lessons for Ghana is not to create import substitution industries over-night.
Written By Cecil Kwashie Adadevoh - The Coronavirus-19 is the pandemic that the rest of the world watched and thought of, unfortunately, as a Chinese epidemic, until fast and large volumes of air travel sent the virus to the rest of the world.
The economic lessons for Ghana is not to create import substitution industries over-night.
This really is not the way to go because if you take the manufacturing of sanitisers for instance, there is no market in Ghana on the current scale of production of sanitisers for the pandemic.
A market is the economic imperative for the success of any industry.
Now, sanitisers cease to be a product of the middle and upper class and has been now democratised. The economic question is, post COVID-19, will sanitisers be in use by every one?
Another thing being manufactured to combat the pandemic are face masks and gloves. These are products used in the medical fraternity. Will there be a market in Ghana, post COVID-19, outside the existing medical market?
The economic reality of the 21st Century has enhanced the argument for a limited government presence in the economy. If the pandemic had been in Dr Kwame Nkrumah’s days, his government would have set up sanitiser, face mask and glove factories.
However, today, the government has engaged the private sector to manufacture what is needed. In the case of the private sector, there exists a huge market for the items so if they can produce sufficient quantities, that can be sold cheaply to cover just the cost of production and they would be more than satisfied.
That is because in these times, it is not so much profit, but a civic and national duty.
For the reasons enumerated above, government must reward these companies with tax incentives and/or guaranteed bank loans so the companies can bounce back to their core line of business, post COVID-19.
The economic lesson for most countries is to leave business for the business communities and allow governments to create the environment for business. The other lesson is to focus on national security industrial capabilities in emergency times.
We must assess what industries we have, their core business, how adaptable they are and whether they can be easily converted to produce for national sustenance. That is the economic imperative and lessons for the country.
There is nothing wrong in aspiring to establish private sector led import substitution industries. Especially, if there is a local, regional or international market.
An examination of rice production in the last two years shows the country is now almost competitive with rice produced in Asia. Import substitution is not a desire but an economic and national security imperative.
With respect to the COVID-19 electoral implications, we do not have to reinvent the wheel. We can have a COVID-19 elections as was held in South Korea. The electoral roll as we have it is the electoral roll until set aside or replaced.
If we want a new electoral roll for 10 million people, then the Electoral Commission (EC) should deploy 500,000 registration centres of not more than 20 people, with the COVID-19 protocols of social distancing, the provision of gloves and face masks.
If the electoral roll is compiled, then the elections can be held across the 500,000 polling stations.
The writer is a lawyer.