Kelhofer unhappy about Ghana’s lack of investments in industrialization

Senior Country Manager for the International Finance Corporation (IFC), Kyle Kelhofer has criticized previous and current governments of Ghana for lack of adequate investments in industrialization and manufacturing.

According to Kelhofer, lack of investments in these sectors is affecting economic growth, however expressed delight coming back to Ghana, haven spent the past 11 years managing IFC’s operations, first in Bangladesh for 4 years and then, Vietnam for the remaining 7 years.

“…The experiences in those countries were profound to see; how manufacturing led-exports has provided stability to the economy, growth to the economy, more and better jobs, particularly, better jobs for women and large scale exports” he said.

Citing an example of some of these profound works, he said; for instance, in Bangladesh, 95% of the exports are apparel, yet you see the GDP per capital grow to high levels, higher than India. Same, he mentioned applied in Vietnam where they’ve grown up value chain of export-led manufacturing growth and created more in better jobs.

“In Bangladesh, they started out, some Koreans came and established few companies and for the first 10-15 years, primarily cream companies. But then, the Bangladesh companies learnt how to do this; they were supplying and then eventually started their own manufacturing companies. Currently in Vietnam, I will say, 95% of companies [are not fully on their own] but there are jobs and there are better jobs for the Vietnamese.”

On how these lessons can benefit the Ghanaian economy, in response, Kelhofer believes Ghana is already in that position to replicate all the good works spoken of the Bangladeshis and Vietnamese. This is what he said:

“I actually think and I compare to when I lived here 10-15 years ago, Ghana actually is in a position now to replicate some of these successes in anesthesia because you do have a track record of stability that: there is a safe and stable environment that there is reliable power supply, there is reliable water, there are efficient road class ports here, there is proximity to market to [those] at the U.S, …, there is a very well trained workforce…

Garment Industry in Bangladesh

He further indicated that, 95% of bangladesh’s exports are from manufacture of apparels.

“…But also now, it’s very competitively priced compared to wage differentials in Asia. So there is a business case that maybe didn’t exist years ago but does exist and sadly, there is unfortunately some devaluations taking place. But every time there is a devaluation, these industries aren’t that much more competitive. I think we are on track and we are seeing more startups coming, with town manufacturers, we have some furniture manufacturers…”

Ghana future

Already seeing this starting to take place in Ghana, Kelhofer is hopeful that the outlook for Ghana in the coming years will pick up.

“Let’s see how it transpires over the coming years. They are starting off well; they are meeting efficiency measures compared to Asia; they are having brand access to these markets; they are training up the workforce, primarily, women; providing a safe, stable working environment. So let’s see but I think we are on track.”

Relative to the manufacturing investment in Asia, Kelhofer said what Africa has is not as big as what they have in Asia.

“There has been much more primarily, commodity, services and agriculture. But I do think there is this opportunity of seeing more interests from international players, whether from South Asia, whether it’s from East Asia, whether it’s from Latin America; they think about building facilities here.”