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 PRIVATE ENTERPRISE FOUNDATION
Interview with
Mr Kwesi Abeasi ,
Director General
August 11th 1999
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Could you give us a brief historical background to your foundation?
As you would know in most countries it is the Chamber of Commerce that leads and talks about business and indeed that was the case in Ghana.
We had the Ghana National Chamber of Commerce but after some time it was felt that the Chamber was concentrating too much on trade and commerce, neglecting the manufacturing sector so a portion of the group broke off to form the Ghana Manufacturer’s Association which later on changed to become the Association of Ghana Industries so straight away there was a split in the private sector front. In the mean time another group had come together as the Ghana Employers Association mainly as a result of the annual ritual of negotiating with labor, just so as to protect themselves and also deal effectively with labor. We therefore had different organizations each saying that they represented the private sector, then as we shifted our emphasis from industrialization to export we also had the formation of the Non-traditional Export’s Group that is the Federation of Associations of Ghanaian Exporters. There was a proliferation of organizations and we felt that was not good enough because it made them ineffective so we tried to bring all of them together. However, each still wanted to keep their individual identities so we decided to put them all under one roof, under an apex body so they could keep their individual identities and concentrate on their specific responsibilities. The umbrella group tackles the general investment climate, promotion and works closely with the government. In 1994 we established the Private Enterprise Foundation and I have been charged with organizing it, and for the past 5 years we have been focusing on 2 areas: promotional role and advocacy role. On the advocacy side what we do is examine the private sector investment climate, general macro-economic climate and determine which constraints are hindering the progress of the private sector. Then, we commission research into those areas, create a forum for discussion to arrive at a consensus and make recommendations. We then go to the government and talk to them about this and try to implement the recommendations. On the promotion side you will notice that there are 2 major organizations dealing with promotion in this country. We have the Ghana Investment Promotion Center and the Ghana Export Promotion Center but both of them are government organizations and naturally have limitations, so what we have done is to bring in a private sector perspective by making sure that we team up with them to do the promotion. Since we came into existence we have managed to get the government to change its attitude towards the private sector when it comes to investment promotion. Now we go with them on these missions even to the extent that for purely state visits we are able to include some of our business people.
How do you generate funds for your foundation?
Since we wanted to move away from the normal subscription and dues which tend to make associations ineffective, what we did was to get a dedicated donor who saw our vision and believed in what we wanted to do. We have USAID which agreed to fund us for the first few years with aid and also help set up an endowment fund which will then be invested. The returns coming from those investments would be used to sustain the foundation and they have been helping us so far. This year we will be setting up the endowment fund and once that is done we can be on our own and our sustainability can be assured. Initially the individual associations were not required to pay subscription but now we are saying that in order to show ownership and to show that we are interested in making sure that the private sector thrives each association should pay a token subscription, and that is in addition to what USAID started us with. We started with 5 founding member associations, now we have expanded and we are still expanding. We started with the Ghana National Chamber of Commerce, Ghana Employers Association, Federation of Association of Ghanaian Exporters, Association of Ghana Industries and the Ghana Association of Bankers. We have now brought in Ghana Association of Women Entrepreneurs, the Ghana Business and Professional Women’s Federation, the Ghana Real Estate Development Association, the Ghana Association of Consultants as well as Ghana Association of Tourism Operators Federation and gradually we have also brought in the Association of Small Scale Industries. We intend to expand to cover everybody and this way we will be able to grow stronger and deal with the government and other agencies. For government and also for the donor agencies this is interesting because now they are dealing with one group and one stop and that has proved to be useful.
Can you tell me how many Associations subscribe to the Foundation?
Now we have 5 founding member associations and 6 other ordinary associated trade and industry associations and as I said we are going down into the informal sector to organize the groups and bring them under the foundation?
How many international associations?
All the international organizations in Ghana are associated with either the Chamber of Commerce or the industry group or the exporters group so through them they belong to the Foundation and we are also trying to link up with similar international organizations. For instance the CBI in Britain is helping us with training and lobbying and we also have an association with the US Chamber of Commerce and with the Indian Association of industry. We have a relationship with the South African Chamber of Business (SACOB) and with the Botswana Chamber of Commerce Industry and Management (BCCIM) so gradually we are building up linkages with others and spreading out.
To what extent do you work hand in hand with these international associations? Do they play a major part?
We have sort of formed a network so we are learning from them, we get some kind of training. As I said CBI has helped us in the lobbying technique. In the past the Private sector and the government were always in collision but we decided that that was a thing of the past, it does not work so instead we are using the lobbying technique, dialogue and we have been able to create a forum where we dialogue every other month with the government at the Vice Presidential level and that has helped the private sector.
As you know the government has set up the Vision 2020 plan, to what extent are you aligned to the criteria set out in this vision?
The Vision 2020 was originally prepared by the government and we said no you do not do that, you have to get everybody involved so it was brought for all people to look at it and give an input for a revision. Now it is a national document that we all worked towards so all our efforts and programs are designed bearing in mind our objectives and aims in the Vision 2020.
| As far as the private sector is concerned, what incentives has the government or you put in place to attract foreign private companies?
The first thing we did together with the government is what we call an investment road map and through this we identified all the constraints and road blocks that tended to inhibit an aggressive investment drive and from that we reviewed the investment code. Through that the Ghana Investment Promotion Council had to be restructured to become a facilitating group instead of a licensing authority and therefore most of the obstructions that we had have been removed. The investment climate has been improved through that, the regulations have been changed, we have liberalized a lot of the requirements for instance you do not need any foreign injection to set up a company here now. If it is going to be a partnership you can start with as little as $10,000. There are only a few restricted areas like taxi and retail businesses which are restricted for locals otherwise you can get involved in any type of activity. The registration of company procedure has also been simplified so all this has been done to make it easier to attract investment. I think those are the things that have been done on the side of the government and again as we also formed the foundation we started getting our people prepared to play a counter part role to prospective investors. We started by giving some training at the very lower levels, some of the organizations were doing training but only at the higher level and at a very expensive level. We said they had to get all these people trained in investment practices, how to manage their business and so on, so we carried the training down to the small scale-medium scale level so as to improve their ability to deal with foreign investors and that has also helped. We have also been involved jointly with government in investment promotion missions in the US, Malaysia, Germany, Norway, we have been everywhere. You would know that in investment promotion it is not a one shot deal, you need to go back and follow up and that is the way we are also assisting.
What would you say are still the problem areas in the private sector in Ghana?
The major problem area is still education, human resource development and utilization. There had been some capacity building but the utilization is a little off track so we need to do some more on the utilization of the already developed capacity and then also go on to develop more capacity because with the liberalization and globalization of world economy it is becoming more and more important that the labor force is skilled and that we improve their capacity to utilize modern equipment, methods and that is an area we need to get more help in.
For foreign investors to invest in a country they need to know the political stability as well as the justice climate. What would you say is the situation in Ghana?
When it comes to politics we look like an oasis in the desert but I am not even as concerned with the stability as I am with the rule of law because if stability were enough we would have a long history of investment. In any case if you look at the level of investment in Angola, Congo, South Africa and some of these troubled areas, as compared to Ghana then you wonder if political stability is an adequate criteria. Yes we have political stability and we are very proud of it and striving to keep it, but we are also working on the rule of law. Unfortunately some of our laws are obsolete and law reform is so slow but we are still pushing and we believe that we are making some progress though the law is still not at the level we want it. The tribunals have helped to increase the efficiency of the court system. We have also introduced our new innovations like alternative conflict resolution methods. We now have 2 arbitration centers; the American Chamber of Commerce has just established another arbitration center in addition to the National arbitration center so those are adding to the alternative that one has to conflict resolution in business. We are hoping we can move faster. We have also been able to view the labor laws and are pushing for these new changes to be effected. We have called for the bankruptcy law which has been on the books for a very long time except that it has not been passed, but now everybody sees the need to do these changes. We are hoping that in the very near future the legal climate would be better and we can gain some more confidence. Additionally we also have signed quite a number of investment protection agreements with several countries; US, Malaysia, Britain, Germany. Those are the additional comforts and we also could use the meager facilities of the multi-national investment guarantee of the World Bank to which we subscribe. That is an additional facility that will give them some comfort.
What is your vision for the future of the Ghanaian economy and particularly for the private sector, and your role within this vision?
I think that the future is bright for the Ghanaian economy especially if we all resolve to keep the discipline that has been injected into the macro-economic management. One of our problems has been that any time we get to another election year our fundamentals get distorted because we go in there with expenses and promises that are really not required. I am only hoping that as we enter another election year, if we can keep our head and continue with this discipline, especially government expenditure then we should be able to make a break through. We have come a long way, inflation used to be at 70% now we are at 10.2% heading for a single digit. If we can maintain the momentum, and we as the private sector intend to keep the pressure on the government so that together we can go down. Cote d’Ivoire just next door has an inflation rate of 1.6%, an interest rate of 11% while we are still high so when it comes to attracting investment we are still have more to do. I see the future as being bright especially since all of us have at a previous national forum on the economy agreed on what needs to be done and we are implementing these recommendations. Once we do this religiously the future is very bright.
On a more personal note what would you say has been your greatest achievement since you have been the head of this foundation?
I think our biggest achievement is to have survived for 5 years without being branded a political pressure group because in Africa the thing is that one has to be careful in talking in advocacy. If you talk too much about things that government does not like it will brand you opposition, if you talk too much about things that the opposition does not like it will brand you pro-government and then your message is lost. I believe that in the 5 years we have been able to walk a tight rope where we are able to tap both the resources of the government as well as the minority to be able to enrich what our recommendations have been. I think that it is a major achievement and if we are able to maintain that then we can remain a stabilizing force and a group that can be taken seriously by government.
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
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