One District One Factory policy, and the implications for job creation

On Friday, the 25th of August, 2017, the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo launched the government’s flagship programme dubbed “One District One Factory” at Ekumfi in the Central Region.

The launch marked the formal introduction and implementation of the government’s industrialisation policy.

The fruit processing factory at Ekumfi is expected to create ready market for pineapples cultivated in the Ekumfi area and its suburbs.

Currently, the factory processes pineapples into fruit juice and other finished products for both local and international markets.

Objectives

Some underlying objectives of the government’s one district, one factory flagship programme are to ensure equitable distribution of factories across the country; create strong link among industry, agriculture and other natural resources; ensure rapid industrialisation; reduce importation considerably; create job opportunities; ensure local currency stability relative to foreign major currencies such as the American dollar, European euro, and British pound sterling; and to enhance wealth creation among individuals and businesses in the Ghanaian economy.

In addition, the programme seeks to ensure equitable distribution of factories across the length and breadth of the country; and to ensure fairly equitable distribution of Ghana’s population across the various districts, municipalities, metropolitan areas, and regions. Finally, the programme is expected to engender internal migration to facilitate realisation of the latter objective.  

Investments and Production Capacity

Successful implementation of the flagship programme in all the 216 districts across the country is estimated to cost US$10 billion.

About $5 million of the recent $2 billion Exim Bank Chinese loan contracted by the Government of Ghana was expected to be invested in the Ekumfi Fruit Processing Factory with full repayment expected to be made by the latter in seven years.

It is refreshing to note the fruit processing factory at Ekumfi has an initial production capacity of about 80 tonnes per day; and expected to produce about 25,600 tonnes of fruit per year.

This translates into 320 estimated productive days (25,600 tonnes per year ÷ 80 tonnes per day = 320 days) throughout the year; and an estimated manufacturing capacity of 480 tonnes (80 tonnes x 6 days = 480 tonnes) per week.

Job Opportunities

The Ekumfi fruit processing factory is expected to create direct employment for 250 persons; and create additional 5,000 direct and indirect jobs in the district. Suppose an average of 250 persons is to be hired in each of the 216 districts across the country.

We could expect employment opportunities for about 54,000 people (250 people x 216 districts = 54,000 people).

Should an average of 5,000 direct and indirect jobs be recorded following the establishment of factories throughout the 216 districts, one could count about 1,080,000 direct and indirect jobs (216 districts x 5,000 direct & indirect jobs = 1,080,000 jobs) across the country.

Each of these 1,080,000 direct and indirect jobs would come along with employment opportunities.

Available data from the Ministry of Trade and Industry revealed as at November 2019, the one district, one factory initiative has resulted in the establishment of fifty-eight (58) factories; twenty-six (26) were at various stages of completion while the construction of ninety-seven (97) were to commence towards the end of 2019.

The 58 established factories created about 10,983 direct jobs and 43,900 indirect jobs respectively.

Undoubtedly, the programme remains the panacea to the country’s unemployment challenges; the programme is expected to create significant number of jobs and contribute meaningfully to the rapid development of rural communities, towns and urban areas while curbing the socio-economic harmful effects of outbreaks such as the Severe Acute Respiratory Syndrome (SARS), Ebola, and Coronavirus or COVID-19 on the Ghanaian economy.

According to the Ghana Union of Traders Association (GUTA), total goods manufactured in Ghana and in the West African Sub-region do not match up to five per cent (5%) of total import demands by Ghanaian traders.

This is indicative of the existence of a yawning gap between locally-manufactured goods and total market demand in the Ghanaian economy.

Prioritizing Ghana’s industrialization initiative would help ensure the immediate establishment of factories essential to the manufacturing of goods that are frequently and regularly imported into the country in large commercial quantities and monetary values.

Conclusion

The industrialisation drive under President Nana Akufo-Addo’s administration could be described aptly as reincarnation and continuum of the industrialisation policy introduced and implemented during the first Republic under the leadership of the late Osagyefo Dr. Kwame Nkrumah.

However, global industrialisation has undergone a series of revolution with the fourth and most recent known as the digital revolution.

Under the digital revolution, existing lines among biological, digital, and physical spheres are blurred to meet increasing socio-economic demands of people in various economies across the globe.

The writer believes managers of the one district, one factory flagship programme would be guided by the exceptional industrialisation exploits of economies such as China, United States of America, Germany, Russia, Japan, Great Britain, South Korea, and others, to guarantee the progamme’s economic viability and success.

The current programme deserves the financial, intellectual, spiritual, social, and moral backing of all well-meaning Ghanaians, external well-wishers, investors and non-investors alike, to affirm its resounding economic success and sustainability while contributing significantly to job creation and employment.

Indeed, COVID-19 affirms the need for an expedited action on the industrialization drive to ensure import-substitution factories are established in strategic parts of the country to reduce the volume of total imports; and to minimize the negative impact of external factors such as supply relative to demand, and prices of goods in the world market; and outbreak of pandemics on the economic fortunes of the country.  



Author: Ebenezer M. Ashley (PhD)

Fellow Chartered Economist & CEO of EBEN Consultancy

Email: ebenezer.ashley@gmail.com 

Website: ebenezerashley.org 



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