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The implementation of the government’s 24-hour Economy policy will be a major boost to address some of the teething challenges facing the One ,District, One,Factory (1D1F) companies, the Minister designate for Trade, Agribusiness and Industry, Elizabeth Ofosu-Adjare, has said.
The minister designate said under the 24-hour policy, companies would receive incentives such as tax holidays and stimulus packages to spur their rapid growth.
Aside from that, she said agri-businesses would be engaged in contract farming to produce adequate raw materials to feed industries.
“So,1D1F companies that will sign on to the 24-hour Economy policy will get the benefit of tax holidays and also the benefit of stimulus packages for their rapid growth,” she said.
Appearing for her confirmation hearing before the Appointments Committee of Parliament yesterday, Mrs Ofosu-Adjare attributed the slow growth of Ghana’s industries to lack of raw materials.
“So, I see the solution to these problems facing 1D1F companies in the proposed 24-hour Economy,” she said.
The nominee gave the assurance when she responded to a question from Member of Parliament (MP) for Nhyiaeso, Dr Stephen Amoah, a friend of the committee on her position on 1D1F and whether she believed in it.
The member, who was invited to ask questions about her knowledge in the Trade, Industry and Agri-Business sectors, also wanted the nominee to tell the committee whether the 1D1F programme had solved Ghana’s problems and if she would continue or discontinue the programme.
Lack of capital
Mrs Ofosu-Adjare, who is also the MP for Techiman North, told the committee that the 1D1F was a programme for Ghanaians and it was initiated by the government of Ghana.
Despite having its positive and negative sides, she said the programme had helped set up factories where individuals could add value to the country’s raw materials.
Mrs Ofosu-Adjare, who spent one of the shortest periods before the 11-member committee, however, expressed worry over how agro-producing factories that had been operating over the years had been unable to provide sufficient raw materials to feed those industries.
That, she stated, had not helped the 1D1F companies to grow the way the government intended them to.
“Again, even though the government supported them with some inputs, they lacked capital and because of lack of access to capital, they have not been able to do their work as expected of them,” the Minister designate for Trade, Agribusiness and Industry said.
Mrs Ofosu-Adjare answered a number of questions on how to improve Ghana’s trade balance, entrepreneurial ecosystem, build the capacity of local businesses to be competitive, address lack of credit for businesses and how best she could work with the Free Zones Authority to ensure Ghana operated only the enclave system, among others.
The Minister designate for Trade, Agribusiness and Industry pointed out that another major challenge drawing back the progress of 1D1F companies was the government’s capping of interest rates for 1D1F companies at 20 per cent, and promising to service 10 per cent for them.
While she acknowledged that such a move was a very good one, along the way the interest rates for the companies shot to 25 per cent.
That raised concerns over who had to pay the difference of 15 per cent since the 1D1F companies had “already sold their products calculated at an interest rate of 10 per cent”.
“And one thing the government has also not been able to do is to pay the extra 10 per cent that it promised these manufacturers,” Mrs Ofosu-Adjare said.
She explained that the solution to the 15 per cent arbitrage would be to renegotiate those loans for the beneficiary companies.
Mrs Ofosu-Adjare also gave the assurance that she would work closely with the Minister of Finance to see what package would be available for those industry players to enable them to contribute positively to the country’s GDP.
Sharing her views on how Ghana could improve its trade balance, the nominee said under the agribusiness initiative, the ministry would engage agribusinesses in contract commercial farming to make available raw materials in Ghana.
That, she believed, would reduce the importation of the raw materials and earn more foreign exchange.
“When we add value to our raw materials, it will also decrease the number of the finished products that we import.
“The import of the finished products will also decrease because we will be having them in the country and with a 24-hour Economy, more production will happen and our exports will increase,” the nominee said.
