Ghana in dire need

-Of huge investments in energy, agric raw materials production – Yamson

By Isaac AIDOO, Accra

Managing Partner at Ismael Yamson and Associates, Mr. Michael Harry Yamson, is advocating for huge investments to be made into raw material supply to boost prospects in Ghana’s agricultural and industrial sectors.

He called for strategic investments in the power sector, on which industry relies heavily.

According to Mr. Yamson, a well-fashioned and deliberate policy direction that hinges on investing along the agricultural and industrial value chain will revolutionize the country’s economy and set the pace for much-desired industrialization.

Mr. Yamson, speaking exclusively with The New Finder, lamented the teething challenges with the supply of raw materials, the lack of investment in warehousing, and the absence of appropriate investment in energy to spur industrial growth.

“We cannot industrialize if we are raw material poor; what we have in Ghana is a situation where our local industries can only get about 30% of the raw materials that they require domestically, and why is that interesting; it is because 30% of our agricultural produce rots, wastes away because we haven’t developed the right systems to harvest, transport them into appropriate warehousing, and we haven’t also developed the right kind of warehousing,” he lamented.

Mr. Yamson further noted that the agro-industries did not exist to convert farm produce into value-added products with longer shelf lives and bigger markets. Ghana’s predicament, he explained, is hydra-headed.

“You don’t have the energy, you don’t have the raw materials, and you are talking about industrialization; so the fruit juice factories are struggling, the sugar factory is struggling, the tomato factory is struggling; everything that requires raw material is struggling, and they are struggling on power that is of poor quality, too expensive, raw materials that don’t come, raw materials that are too expensive,” he submitted.

On energy, Mr. Yamson welcomed the government‘s latest announcement to restore the energy sector by auditing the sector, reviewing the tariff-setting structure of the regulator, the Public Utilities Regulatory Commission, as well as reviewing the cash waterfall mechanism.

According to Mr. Yamson, “let’s get the energy sector right because the energy sector is filled with very high-quality people who know what needs to be done.” He pleaded for the public sector to be allowed to “be what it is.”

“It is supposed to be run for the benefit of the public purse as opposed to the benefit of a private shareholder,” Mr. Yamson pointed out, adding that the public sector must be run efficiently to create surpluses.

A successful production of enough raw materials will serve as an import substitution mechanism to reduce the country’s heavy dependence on imports.

$636m worth of raw materials imported

In 2019, Ghana’s raw materials imports are worth $636 million, product share of 6.10%, while raw materials exports were worth over $8 billion ($8,075 million)

Fast-Moving Consumer Goods

The development of an efficient local supply chain programme for Fast Moving Consumer Goods (FMCGs) producers operating in Ghana will also compliment the policy.

Backward integration

Such a policy will have the FMCGs integrate backward with a little bit of their skin in formidable local supply chain operations.

Backward Integration is a strategy where a company gains more control over the functions in the earlier stages of the value chain.

The backward integration can be replicated in many formats together with an effective match-making arrangement to develop and link local capabilities, no matter how small with big corporates.