Friday, 8 May 2015

Unlocking Ghanaian Entrepreneural Energies - Let's Get Our Young People Out of the Roost Early!!

Amazingly, the most powerful insights and keys are usually very simple although not apparent on the surface of things.

Recently, I was watching an interview of Mrs. Rosa Whitaker Duncan Williams, wife of Archbishop Nicholas Duncan Williams, on Joy TV – PM Express hosted by Stephen Anti – and in response to a question about adjusting to living in Ghana and being a mother, she said that one of her initial shocks is how children in their late teens still asked their parents for money in reference to her step children. Apparently, she was on her own at 16. No wonder she has done so well for herself I thought.

That got me thinking and it dawned on me that, perhaps, the reason for the state of our economy - the dearth of entrepreneurial zeal and skills in young people leading to the high unemployment we decry - may not necessarily be due to the lack of knowledge of entrepreneurship - something business schools are happily exploiting – but rather in how Ghanaian kids, especially from the middle class are raised: GENERALLY, WE ARE NOT MADE TO BECOME INDEPENDENT EARLY ENOUGH!!

I have noticed from reading the success stories of entrepreneurs in Ghana and the world over that such people, usually through circumstances, were forced to be independent early in life and that helped shape entrepreneurial drives and skills in them. In the US, the hotbed of entrepreneurship, young people are made to get out of their nests much earlier than their counterparts here in Ghana etc. In the US, you’d find young college students working to pay their way through school even though they come from middle class backgrounds. Not so in Ghana. Most youth from middle class families STILL depend on pocket money from their parents or loans whilst in university. Perhaps, that may also explain our obsession with aid and loans as grown ups!! The exception are the “bogas” (students who travel to do menial jobs during school vacations to earn some money) who are usually in the minority. In fact, people who traveled outside while in the University especially to work tend to be more self-sufficient and more likely to be entrepreneurs than those who didn’t.

This way of raising children – our future leaders - by not exposing them to the realities of life early inhibits the development of entrepreneurial behaviors. Also, most Ghanaian youth stay with their parents until they are preparing to get married. I am of the view that this particular cultural pattern of delayed exposure to the real world hampers the development of entrepreneurial skills in us. The experience of fending for yourself alone is enough education in how to be a good business person than all the entrepreneurship courses in all the business schools combined.

I have noticed that most successful entrepreneur types in business, politics, church are usually people who through difficult circumstances, usually poverty, had to fend for themselves quite early in their lives forcing them to develop these critical skills which helped them later in life.

Rather than focusing on workshops, seminars and books on the subject, we must complement these by getting young people to be on their own much earlier than prevails now. Government, schools and churches need to in their various ways begin to get us to be more independent and self-sufficient than we have been.

That, perhaps, may be the key to unlocking all the entrepreneurial energies buried in our youth which will transform our dear nation.

NB: This piece was first published in my Facebook notes on June 4, 2013.

Thursday, 12 March 2015

The Deceitfulness of Riches

Ever since the fall of man in the garden of Eden triggering what has come to be referred to in theological parlance as the Adamic curse, money, or purchasing power, has assumed

Monday, 9 March 2015

Ghana @ 58


One of the things about management principles and techniques is that they are applicable in both the public and private sectors. One of the most useful tools ever developed in management is SWOT analysis; S - Strengths, W - Weaknesses, O - Opportunities, T - Threats. As we celebrate and take stock of our journey as a nation after 58 years of independence, I would like to use the occasion to do a SWOT analysis of Ghana and use that as a frame of reference to assess our efforts at breaking our unfortunate development patter of two steps forward, one step backward. No doubt, Ghana has chalked some successes as a nation, but let's be honest: compared to our peers - South Korea, Malaysia, Botswana - we have been mediocre. Of course, we are not where we are in a vacuum: our biggest challenge has been the country's political instability, especially after the overthrow of our first democratically-elected government, but that in itself was a choice we made. 

The president in recent times has been speaking about his desire to transform Ghana and this desire was reflected in government's 2015 budget statement, and reiterated in his recent independence day address. The aim of a SWOT analysis, is to assess an organization's, or in this case a country's positioning relative to its end goal and develop a plan of action to move it from where it presently is, based on the SWOT analysis, to where it would like to be. In doing my own version of a SWOT analysis of Ghana, I hope to explore, in broad strokes, the obvious actions, flowing from this appraisal, that a political leadership truly committed to national transformation should be aiming at doing within a coherent and reinforcing framework to accelerate Ghana's progress towards becoming a nation that provides a decent standard of living for its citizens and hold its head up high in the world as envisaged by our first president Dr. Kwame Nkrumah when we became independent.

A SWOT Analysis of Ghana















Strengths                                                            
Strength #1 - Political Stability
  • Since the 1990s the number of democracies in Africa have increased from 4 to 17 according to this author - http://www.voxeu.org/article/democracy-africa - with Ghana being among the foremost in the West African sub-region. As the adage goes, "Among the blind, the one-eyed man is king." This seems to sum up Ghana's edge as a democracy in Africa. 
  • Being a democracy is a strength because investors generally tend to see democratic countries as safer on varying levels places to do business because democracies ensure critical soft infrastructure for businesses such as the rule of law which fosters a predictable legal regime that ensures contractual rights are respected and enforceable through the courts in the event of dispute. But ultimately, democracy is a means to ensure good governance in a way that allows a diverse group of people to live together peacefully and go pursue their activities without the threat of violence or domination by one group over the other. 
  • Much as it is a great reputation to have, ultimately, it is meant to attract capital and unleash human potential because of the environment of freedom it creates to accelerate a nation's development. That is what has inspired the encouragement of democracy as the best governance model for African countries to accelerate development and the empirical evidence bears this out. But democracy comes at a cost. Ghana's recently botched district level elections is estimated to have cost some GHS 300m (USD 100m) - http://www.ghana.gov.gh/index.php/2012-02-08-08-32-47/general-news/7232-ec-spends-gh-310-on-botch-district-elections-veep - and these investments in institutions, organizing elections, media freedom is meant to deliver better governance which ultimately is expected to translate to strong economic growth and improve the living standards of the citizenry. 
  • As we celebrate this strength we have as a country, we must recognize that being democratic is not an end in itself but a means to deliver good governance to Ghanaians. Going forward, we should measure our democratic progress on how well it promotes citizens engagement in development and in delivering improving standards of living.     
Strength #2 - Great weather and environmental conditions
  • Ghana is fortunate to be located in the tropics. The weather conditions make it conducive for growing different varieties of food and with large tracts of arable land, there is no reason why we shouldn't be looking at a green revolution. Almost all the foodstuffs consumed in the country are imported. Government has stated its goal of reducing imports of rice and sugar over the next ten years to boost our terms of trade and help address the perpetual depreciation of the cedi. 
  • But this drive must be pursued with more energy and focus than it currently is now. Agribusiness offers low hanging fruits for economic transformation and this must receive more attention and focus from government.
  • Beyond agriculture, Ghana is blessed with many wonderful tourist attractions which must be better harnessed. Tourism offers local employment opportunity for locals and foreign exchange.
Strength #3
  • Ghana is resource rich. The following list from the CIA fact book - gold, timber, industrial diamonds, bauxite, manganese, fish, rubber, hydro power, petroleum, silver, salt, limestone - gives a sense of the amount of resources the country has, not to speak of its incredible people. Africa and Ghana is no exception is projected to have the most youthful population in the coming years representing a great pool of labor and markets for goods and services. We must not allow this to slip though our fingers.
  • Many countries would kill for our demographics. We let it slide at our own peril. 

Strength #4
  • Our ethnic and religious diversity is a plus. Let's leverage it. Diverse groups have been proven to be qualitatively superior compared to groups without any diversity. 
Clearly, despite our missteps, we have a lot going in our favor. What should engage us as a people and as policy makers is how to harness these strengths to the full for mother Ghana's ultimate benefit such that another 40 years from now, we would be patting ourselves on the back for being able to turn around our fortunes within a decade as has been done by China.

Weaknesses
Weakness #1 - Weak Institutions
  • This is not an empirical statement but our institutions in the real sense of the word exist in name. In reality, they are instruments in the hands of the ruling party which is unfortunate. The incarceration of the former GNPC Chief Executive, Tsatsu Tsikata, and the dismissal of the former GIPC boss Ahomka Lindsay are cases in point. Ultimately, strong institutions keep the abuse of power by any one person or institution in check and this is what great democracies are founded on. Ghana has only began this journey. My lay view is that it's because of the design of our constitution which concentrates too much power in the president of the republic and the centralization versus decentralization of power. To make our institutions effective, these two fundamental design flaws must be addressed. To complement these, civic education must constitute an integral part of our educational system and be pursued vigorously by the constitutionally mandated institution, the National Commission for Civic Education (NCCE). Equally important is to set up a transparent process that ensures that competent people with integrity are appointed to head our key institutions and a framework which balances their removal when found not to be delivering on their roles against protecting them from interference.
Weakness #2 - Infrastructural deficit
  • Africa's infrastructural deficit, especially in the power sector, as a constraint on Africa;s economic growth has been well-researched and documented. According to the African Development Bank, Africa needs $93bn p.a. between now and 2021 and Ghana's situation is no different. This has been brought home even more forcefully as we continue to battle the effects of our current power crisis costing us between 2-6% in GDP growth. 
  • Private capital is the only out through Public Private Partnerships. But these will not and cannot work if we don't build the needed capacity to be able to identify these key infrastructural projects and package and sell them in an attractive way for investors. More importantly, these must be transparent and devoid of corruption. 
Weakness #3 -  Commodity-based economy
  • A symptom of dysfunctional politics. Apart from the first president's efforts to change the structure of Ghana's economy from being an exporter of raw materials and an importer of finished goods, there has been no sustained effort to do this. 
  • The case for economic transformation is clear. What is required is disciplined execution and Ghana has enough human capital and abundant examples of countries that have done it to guide us. Perhaps, what has undermined this effort is the placing of political considerations ahead of technical competence and integrity rather than a combination. 
  • Again, my lay view is that until the political architecture is corrected, it would be difficult to achieve this because transformation requires politically difficult choices in the short term and extreme fiscal discipline and prudence. It would take a bold, selfless leader to do this but it can and must be done.
Weakness #4 - Large public sector with low productivity
  •  Also a symptom of our politics. The public sector has been a place where political leaders put people they are unable to create jobs for. And because entry is not by merit but through political affiliation, the sector has rather undermined the private sector, the engine of growth. No advances can be made without correcting this.

Opportunities
Opportunity #1 - Rising Middle Class
  • With Africa and Ghana projected to have the highest growth of its middle class following its impressive growth rates in recent times, it presents an opportunity for firms who would not like to loose out. Ghana's government has a unique opportunity to use this as a lever for growth and create a virtuous cycle of growth, tax revenue, infrastructural investment and more growth.
 Opportunity #2 - Youthful Population
  • The demographic dividend of having a youthful population is there for our taking. Ghana must invest in the education of its youth and training in technical jobs to attract global firms in need of cheaper labor. 
Opportunity #3 - Comparative Advantage in Agricultural Production
  • As already discussed, Ghana needs to engineer its own green revolution and aim to feed its people from his large tracts of arable land from which it can begin its industrialization.
Opportunity #4 - Pool of Diasporan capital and skills 
  • The recent appointment of Tidjane Thiam as UBS chief is a case in point of what Africans and Ghanaians are capable of doing given the right environment. Ghana has had its own Kofi Annan at the helm of the U.N. We must create an environment and facilitate the temporary and permanent relocation of diasporans with skill and/or capital to come back home and help. Initially, only a few would respond but following good testimonials from fellow diasporans. many more would be encouraged to follow suit.
I saved the threats for last because in my view, this is the most important thing: identifying what can derail this very fine opportunity we have as a nation to turn things around for the better over the next generation.

Threats
Threat #1 & #2 - Corruption & Winner Take All
  •  As far as I am concerned, these two are the critical factors that will make or unmake us as a nation over the next four decades: our ability to tame corruption and diffuse executive power through decentralization. According to Nicholas Nassim Taleb (NNT), centralization makes us fragile and more vulnerable to irreparable breaks. Certainly we don't want that.
The constitutional process offers us a great opportunity to correct the mistakes of 1992 in our fourth republic and to truly set Ghana on the path to becoming truly the Black Star of Africa. For me, without clear progress on these two, Ghana will be merely celebrating a pseudo independence without any real relevance and impact on its citizens.