Former ambassador under the Mahama administration Dr. Tony Aidoo has said President Akufo-Addo must not look up to the private sector if government truly wants to move Ghana beyond aid.
While the suggestion might appear to be an ideological heresy to a party of laid-back government and free-roaming businessmen, Tony Aidoo explained, the investment needed to develop the country will not come from private investors.
“What we need is a strong government that leads rather than a government that repose trust in a private sector that is essentially parasitic,” he said last Saturday on Newsfile.
The former Head of Policy Oversight and Evaluation unit at the Presidency was weighing in on a tough-talking speech by President Nana Akufo-Addo who repeated to his French counterpart Emmanuel Macron his tagline of free trade and not aid.
The ex tempore comments have made rounds on social media collecting applause and comparisons to Kwame Nkrumah who was known for his fierce views on economic exploitation and neo-colonialism.
Joining in tacit applause, Tony Aidoo who was a former speech writer to President Rawlings observed that similar presidents have made the same point.
“I recall when I was one of the speech writers of Rawlings, every state visit we made a point of putting it in that what Ghana and other countries require is not aid but fair trade”, he told Samson Lardy on Newsfile Saturday.
He observed that there is a deliberate agenda within the global economic structure to keep Ghana and third world countries playing insignificant economic roles by providing simple raw materials.
They do this by making inaccessible, the capital needed to finance serious development. By serious development, Tony Aidoo said he meant industrialisation.
“There is no country in the world that has developed without industrialisation and there is no country in the world that has industrialised without the development of indigenous appropriate technology”.
Ghana’s problem therefore is about where to find the capital to develop and which activity can best raise this capital, Tony Aidoo who hold an Msc. in International Affairs said.
He pointed out that to industrialise, Ghana must play to its strength – agriculture.
“What we need is an agricultural system that adds value… we need to process”. He said this requires government to make focused investment in agriculture instead of spending monies across several sectors of the economy.
“So far we have been spreading ourselves so thin because we have been caught up in a vice..the vice is that you have a large infrastructural deficit that you need to bridge”.
The challenge is therefore how to raise huge funds for development financing.
“Your people don’t pay the necessary taxes and therefore you have no choice but to go out and borrow”, he said.
Applying this background to President Akufo-Addo’s economic plans which include setting up 216 factories and a strong push to encourage agriculture and promote irrigation, Tony Aidoo said, the plans need enormous funding.
The plans are “strategic so longs as you have the capital to support it. But where is the capital? The only source of the capital is borrowing” he said.
He lamented that over the years, governments have failed to widen the tax net to capture the contributions of the bigger economic sector – the informal businesses.
“If you can persuade your citizens to pay the tax that is needed to support these projects that’s fine. But you cannot”, he despaired.
Tony Aidoo wants government to “promote this informal sector to a formal position whereby they can be caught in the tax net”.
One of the ways government can do this is to encourage the private sector to focus on Small and Medium scale Enterprises(SMEs) instead of attempting to do big projects with government when they lack the capital.
“Look at Mills, Mahama Private-Public Partnerships(PPP). I was critical of those because I felt the PPP should concentrate on indigenous SMEs..so you can catch them in the taxable net”
“The PPPs seem to be concentrating on businesses that are only looking for loans and government support. If they were good, they wouldn’t be looking for that” he shared an observation.
Tony Aidoo indicated that government must learn from economic history and heavily move into state industrialisation.
He pointed to Japan’s industrialisation led by its emperors to help set up Toyota.
“And yet the modern economic books will tells us it was private capital. What private capital that led to British industrialisation? What private capital led to German industrialisation? It is state. It is state”, he emphasised.
“There are so many areas of the Ghanaian economy that are virgin that the private sector won’t go and therefore it is the duty of the government to go there but this is not what we want to do”.