Business News of Wednesday, 4 April 2018
Mr Kenneth Kwamina Thompson, Chief Executive Officer of Dalex Finance and Leasing Company has cautioned that government’s flagship project “One-District-One-Factory,” is at risk so long as the Cedi continues to be overvalued.
All the proposed 1D1F industries would be uncompetitive and the initiative would be a potent risk of failure, Mr Thompson stated in Accra, explaining that 1D1F was too important a programme for such a compelling argument of a serious risk of failure not to be addressed.
He said: “We hope that the relevant authorities such as the One-District-One-Factory Secretariat, the Ministry of Trade and Industry, Bank of Ghana, and the Ministry of Finance will respond to this argument in the days ahead”.
The 1D1F programme aimed at establishing, at least, one factory or enterprise in each district of Ghana as a means of creating economic growth poles that would accelerate the development of those areas and create jobs for the teeming youth.
Government through the initiative proposed to undertake a massive industrialisation campaign across the country, to equip and empower communities to utilise their local resources in manufacturing products that were in high demand both locally and internationally.
Speaking at a public lecture organised the Chartered Institute of Marketing Ghana (CIMG), Mr Thompson created an imaginary conversation with Mr Ken Ofori-Atta Minister of Finance on “Facing up to realities” on the economy of Ghana.
Mr Thompson based the analysis of the value of the Cedi using the ‘Big Mac’ Index of ‘The Economist’ magazine, and suggested that the true value of the Cedi could be as low as GH¢13.00 to One USD, therefore concluding that the Cedi was overvalued by as much as 139 per cent.
He said the Cedi was grossly overvalued, stressing that the overvaluation made imports cheaper and exports uncompetitive. “This effect put a constraint on Ghana economic growth and causes extensive unemployment with its resultant poverty.
“The policy aims to transform the structure of the economy from one dependent on production and export of raw materials to a value-added industrialised economy, driven primarily by the private sector”.
In an interview with the Ghana News Agency, Mr Thompson explained that Ghana’s economy faces serious challenges, stressing that the economy may suffer dire consequences.
For him, the country’s economy is heading for a crash and averred that figures Bank of Ghana released indicate unambiguously that the country was broke, stressing that “Ghana is broke.”
Mr Thompson also noted that; “We are very wasteful in this country. We are extremely wasteful in this country”.
He also indicated that much needed to be done to rescue the country’s economy from decline.