Home News 1D1F Will Reduce Dependence On Foreign Aid – Prez.

1D1F Will Reduce Dependence On Foreign Aid – Prez.

10 min read

By Frank Amponsah

President Akufo-Addo has said that the successful implementation of the 1D1F initiative, which is the trailblazer on the African continent would bring higher economic scale of production, a strong inclusive economy with no difference between urban and rural livelihood, and a total factor productivity growth whereby more output per unit of input will be achieved.

According to him, with the 1D1F program, he can see “a new Ghana as a higher growth in income per capita, increased domestic savings, robust capital market developed, reduced dependence on foreign aid, and the Ghana Beyond Aid dream made a reality.”

He said “With the 1D1F which is private sector led Initiative, Government is playing a facilitator role by providing the enabling environment for the establishment of the factories. Further, Government is evolving industrial policy to reduce the cost to private firms in securing financial support and foreign technology to enhance production capacity.”

The President was commenting on the Status Report presented on the 1D1F Programme.

He averred that the inspiration for launching the One District One Factory Initiative stem from deep rooted conviction that the path to rapid economic transformation and prosperity for Ghana required effective utilization of the abundant natural resources and the large pool of human capital.

He expressed optimism that given the resources at the country’s disposal, government can unleash the huge potentials to follow the path of Ghana’s compatriots like Malaysia, South Korea, and Singapore to attain sustainable higher income per capita. “This growth path is hardly unique,” he said.

“Japan managed to achieve growth in per capita income between the 1880s and 1970s through industrialization. Indeed Europe, Canada, Australia, and United States all gained high levels of income per capita by shifting from agrarian based production to manufacturing.”

He acknowledged that during the First Republic, very serious attempts were made to industrialize the country when an aggressive import substitution industrialization agenda was pursued but the approach was riddled with problems, paramount amongst which was the import dependency for raw materials to feed the industries established.

According to him, the foreign exchange crunch of the late 1960s through to the 1970s took a heavy toll on the factories, which were largely state owned, and they eventually collapsed.

The Status Report

The 1D1F Secretariat has received 789 business proposals from across the ten regions of the country with the Greater Accra region coming with the largest proposal of 160.

It emerged that the project areas cover industries such as agro processing (livestock), agro processing (crop), energy, hospitality/fashion, manufacturing (other than agro products) and health.

According to the Report, the Secretariat has also reviewed and forwarded 242 projects to the various financial institutions and other funding agencies including GCB Bank, UMB Bank, Ghana Exim Bank, Barclays Bank, CNBM – MOTI among others covering fruit processing, potato processing into bread and chips, cassava into ethanol, pharmaceuticals, garment manufacturing, cashew processing, Shea Butter processing, tile and brick production, avocado processing, carbonated beverage production, timber processing among others.

The Secretariat has partnered with ISSER, University of California and International Growth Center (UK) to undertake a research on “Manufacturing Capabilities of Districts in Ghana.”

The Report indicated that the research conducted in all Districts in the country reviewed the raw material availability and the need for a factory in the Districts.

“The research also sought to find out what led to the collapse of companies that previously existed in the District,” the Report stated.

The said Research according to the Report, has discovered huge similarities existing across some of the districts with respect to the availability of productive inputs, manufacturing capabilities, and factory preferences, recommending that factory projects should not be considered in isolation; rather, the government should carefully consider cohesion and connectivity through the creation of national and international value chains.

It also emerged that the input-procurement arrangements, labour management, marketing strategies, and general managerial capabilities should be key considerations in the selection of factory projects in order to ensure the factories’ sustainability and survival where factory proposals that are being considered should be required to provide a detailed outline of how they will deal with these key considerations.

Also, the support and concessions the national and local governments will be granting need to go beyond helping the factories overcome the problem of access to capital and land because they need to also focus on the soft issues of managerial capacity, including input procurement and labour management, and help them establish links with large buyers nationally and internationally.

It also recommended that government should help to ensure reliable and affordable energy options as well as easy spatial connectivity through the provision of improved transport infrastructure.

Meanwhile, the 1D1F Secretariat has engaged KFW, a German Development Bank has existed for more than 65 years and discussed how their activities could be linked to the 1D1F initiative.

The Secretariat said it has engaged KFW mainly to provide financial cooperation with Government on transactions whereas KFW DEG provides entrepreneurial cooperation with the private sector.

“KFW supports government and public companies with fiduciary funds (German Federal Budget). They also provide grants, loans and advisory services for projects. KFW’s partner in Ghana is the Government of Ghana through the Ministry of Finance. They collaborate to achieve a common goal.”

The Secretariat has also engaged GSA to provide training and guidance to Promoters in meeting the requirements of standards for products whilst engaging with government agencies, research institutions, donor agencies, investment fund managers to provide strategic support to the program.

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