1.Let me thank the Ambassador of Denmark, Tove DegnbolHonourableMr. Esben Lunde Larsen, Minister for Environment and FoodOur Minister for Trade and Industry, Hon. Allan KyerematengMinister for Water Resources and Sanitation, Hon Kofi AddaMinister for Transport, Hon Kwaku AsiamahDeputy Minister for Trade and Industry Hon Ahomka LindseyOther Ministers presentCEO of GIPC, Yoofi GrantPresident of the AGI, Dr Yaw Adu-GyamfiDeputy Director, Confederation of Danish IndustryThe entire Danish Business Delegation, Distinguished Guests, Ladies and Gentlemen, and the Media present.
2. I am happy and most privileged to be part of this grand opening of the Danish-Ghana Business Conference and to speak on a subject that is gaining relatively greater attention in our conversation with our development partners: Ghana Beyond Aid: Moving Forward Together”.
The President of the Republic, Nana Addo Dankwa Akufo-Addo, has spoken on this subject, signalling his aspiration and Ghana’s aspiration, to change the status quo and our conversation around aid. He has been clear that while we acknowledge that ODA will continue to contribute to our development process, we as Ghanaians, home and abroad, must be the leading investors if we are to achieve a sustainable development path.
4.I spoke on this subject on October 18 at the invitation of our Development Partners. Our aspirations to move Ghana Beyond Aid was echoed by the Minister of Finance, Mr. Ken Ofori-Atta when he presented the 2018 Budget now before Parliament for debate. We are focused on this conversation and what government has been doing in the past 11 months demonstrate our commitment for change.
5.Today, I will speak briefly on four things:
First, I will reiterate some few points from my October 18 remarks during our meeting with development partners.Second, expand on our vision of Ghana Beyond Aid as articulated in the 2018 Budget and highlight our consistency of purpose and the search for pathways.Third, list some of the key initiatives to build a platform to intensify domestic resource mobilizationFinally, identify what we can do together as partners to move Ghana Beyond Aid.
In my October 18 presentation I highlighted the following.
6.Development aid was born out of the need to accelerate post-colonial development. Aid (grants, loans and project and technical assistance) was to help fill the savings-investment gap, the technical capacity gaps, and the development finance gaps in order to promote growth and development.
7.Development Assistance was born. It has been a long road since. Aid has become an integral part of the development partnership with varying impact across countries. For many recipient countries, weaning themselves off what was intended to fill the savings-investment gap has not been easy.
8.For Ghana, until the mid-1960s, aid inflows were relatively unimportant but that would change over time. A proxy measure of a country’s dependency on aid is the total Net Overseas Development Assistance (ODA) divided by a country’s population.
9.The ODA per capita (1987 constant dollars) in 1960 amounted to $1.44, rose to $19 by 1970, to $21 by 1980 and sharply to $64 in 2011.
10.The importance of aid to the development of Ghana over the last 50 years is well documented. Much about what aid has done or not done, and the challenges that face those who give and the intended beneficiaries are also well known.
11.But there is a changing landscape on how far we can continue to depend on the generosity of development partners to build resilient economies. The writing has been on the wall since the Monterrey Consensus on Financing for Development in 2002, followed by the Doha pledges of FfD2.
12.The pledge to scale up commitment to finance the MDGs fell short of expectations, admittedly not of ill-intent. By 2012, 3 years before the end of the MDG timeline, only 7 out of the 24 OECD members had met that commitment. I am happy to say Denmark was one of the 7.
13.If financing the 8 MDGs became a challenge, the financing g of the 17 SDGs is expected to pose even greater challenges. Like the MDGs, success of the SDGs depend on countries agreeing on broad policies on financing. And particularly for Africa success depends on systemic issues which emerged at the 3rd Financing for Development meeting held in July 2015 ahead of the September launch of the SDG. The theme of domestic resource mobilization emerged as the recurrent theme and it gathered a great deal of momentum.
14.The financing of the SDGs are enormous. Estimates vary but they consistently point to a significant sum. Some believe that global public and private savings would be sufficient to finance the new development aspirations. But that hope is not new. The same expectations were held out for the MDGs. From Gleneagles in Scotland in 2005 to the G8 meeting in Germany in 2007, the reality did not match the ambition for a number of reasons; partly because of the global financial crisis of 2008-2009 and the ensuing fiscal challenges faced by many traditional OECD partners, and partly because of the changing views of citizens of donor countries about the success of aid.
15.It is all too evident that current financial flows and investment patterns certainly in Africa are not likely to deliver on the financing needed to attain sustainable development needs.
16.Ladies and gentlemen, for Ghana, again the infrastructural and human development investment needs are substantial. It is the President’s firm belief that we need an innovative and integrated policy framework that mobilizes and effectively uses all sources of finance – public, private, domestic and external should be the pathway to financing our development.
17.The President together with his team has chosen a strategic shift and according to him, “We want to build a Ghana which looks to the use of its own resources and their proper management as the way to engineer social and economic growth in our country…”
However challenging, however daunting the task, we must start now.
18.Fortunately, much of the elements we need are inherent in the SDGs and are echoes of what were required for the MDGs: an enabling domestic environment, including good governance, sound economic policies, solid democratic institutions, rule of law, and sound national policy strategies. These are also the tenets of the government led by Nana Addo Dankwa Akufo-Addo.
Second Point of the Day:
What do we mean by a Ghana Beyond Aid
19.A Ghana Beyond Aid means mobilizing and leveraging domestic savings and revenues transparently; expand financial inclusion with credit services and saving systems for all, especially women; and financing through local capital markets in local currencies.
20.It is also means
where domestic resource mobilization is enhanced through higher private savings and higher government revenues raised in a more efficient and equitable manner; andwhere there is resolute efficiency and accountability in the use of all public resources;
21.It means investing in people and building the capacity of the next generation of citizens, including access to quality education to building their overall capacity for innovation and knowledge. It means encouraging entrepreneurs, small business, private investment, and innovation.
22.It is this vision and building blocks that we seek to put in place that have driven the policies of our government since assuming office about 11 months ago.
23.We assumed office at a time where our economy was facing challenges but we set clear vision to say that we need to promote the private sector. We need to improve the business environment. If you look at what we are trying to do, if you want to move beyond aid it means necessarily that you must focus on trade and investment.
24.If you’re moving beyond aid, then it is to trade and investment and that is essentially what we are trying to do. In moving to trade and investment you want to set the business environment that will allow you to do exactly that. Without a conducive business environment you are not going to make it and this is why we set about very quickly trying to make sure that the macro economy is stable.
25.Fiscal consolidation meant that we were bringing down the deficit. We’ve reduced the deficit from 9.4% last year, we’re coming down to 6.3% this year and next year we hope to get to 4.5% so we will halve the deficit in two years basically and in so doing, in consolidating the fiscal, we are seeing the benefits: inflation is coming down, interest rates are coming down and exchange rate is relatively stable.
26.We’ve reduced taxes; about 15 taxes were either abolished or reduced. We’ve moved to try to encourage private sector participation in the production of infrastructure in this country. It is very very important to note for example that the single largest private sector investment in Ghana in 2017, GIPC was just telling me, was from Denmark. This is an investment in MPS of 1.8 billion dollars for port expansion. This is very very significant and this is much more than government is spending on domestic capital this year.
27.This is one private sector investment and this is exactly what we are talking about: if the environment is conducive, if the structuring is right, the private sector can actually lead the whole investment drive to what we’re trying to do.
28.We are also realising that to get the private sector to move, to get a conducive business environment, you not only have to stabilize the macroeconomy; you also have to formalize the economy. A chaotic economy, an informal economy is not one where the private sector can really thrive. Unless you’re only looking at the digging of gold and drilling oil; that is very easy. That can even survive in war but if you’re looking for systematic private sector investment you need a more formalized economic system and this is why we have embarked on a digitalization of the Ghanaian economy.
29.There is a digital transformation going on as we speak. We are going to issue national ID cards with facial, iris and biometric identification for everybody in Ghana. Whether you are a foreigner falling or indigenous Ghanaian you are going to be uniquely identified. We have launched a digital property address system which means every 5 * 5 square metre of Ghana today has a unique digital property address, so you can find everybody and find every business and it opens up the space for e-commerce and so on.
30.We have digitalized the issue of drivers licence and vehicle registration. We have digitalized the registration of businesses. Today you can register your business in Ghana online even from Denmark; it will take you within 48 hours to do so.
31.So we are moving to formalization of the economy. There is going to be launched in either next month or in January an interoperability of the domestic payment system between the banks and the mobile companies so that you will have financial inclusion across the country.
32.We’ve quickly to recognise that as a country we have to move with agric and industry supported by infrastructure development so the government is investing and promoting investment in agriculture and we are seeing the results already this year. We’ve launched our One District One Factory program to encourage investment across the length and breadth of Ghana to use our resources.
33.We are also learning from countries such as Denmark. We know that fundamentally to build productive capacity that the private sector is going to rely on, you need to have an educated population, you need to have an educated workforce. We know about the free education in Denmark, and we have also implemented, this year, free secondary school education for Ghanaians going forward and that is very important in building the type of knowledge economy that we want to build.
34.We are very very optimistic going forward about about Ghana. The possibilities for me are endless, if we all put our minds to it. The private-public partnership frameworks are being put together and we believe that the sky really is the limit if we put our acts together.
35.I would like to thank all of you for your attention and to say that the cooperation between Ghana and Denmark as far as we’re concerned is a win-win cooperation for our respective business communities. May our development partnership continue to flourish in innovative ways.
36.Thank you very much for your attention. God Bless our Homeland Ghana