In President Akufo-Addo’s latest interaction with the press, he did not miss the opportunity to announce to the world what he thought of the criticisms of his policies by Ghana’s “think tanks”. He believes the criticisms are “bombs” with “little substance to them”. He also made it clear that he would not allow such criticisms to influence the direction of his government in any way.

Considering that the primary goal of most think tanks around the world is to persuade Governments to take their analysis and critiques seriously, the President’s comments amount to a virtual dismissal of the role of think tanks in Ghana. In my brief visit to Ghana this month, I learnt from conversations with some think tank leaders how dimly these high-level political sentiments are viewed by the policy community.

This is surprising since President Akufo-Addo and his aides seem very keen on showing his openness to ideas from all sections of society. Visits by all manner of “influencers” are prominently promoted in the press by the Presidential PR team.

By my count, more show artists – from Wisa Gried and D-Black to Stonebwoy and Shatta Wale – have been granted televised audiences with this President in his first two years in office than any other President in Ghana’s history. Clearly, the President seeks to portray his administration as an “open” one, a “listening government”.

Just recently, Ghanaian music star, Sarkodie, warned darkly about economic developments in the country, and requested another audience with the President.

Other artists have been equally uncharitable about developments in Ghana. Yet, we haven’t seen the President greet their comments with the sweeping contempt that he recently showed to think tanks in Ghana.

This is surprising; after all think tanks spend their professional time examining government policy in order to enrich public debate about the correctness of the course politicians are taking the nation. Is there not room to argue that politicians ought to be even more tolerant of them, since this is their primary role in society?

The President’s words have emboldened his followers to mobilise ill feelings towards think tanks, their work and the motives that guide that work. The resulting climate breeds misguided attitudes about the nature of government policies and projects.

Government policies and projects are not really “products” bearing the “brands” of political parties, with the President being the chief brand ambassador.

By choosing to treat them as such and frequently seeking “exclusive ownership” of these public policies enacted in the collective interest of Ghanaians, the President and his Administration have been led down the path of treating every critique, not as an opportunity to refine these policies and projects, but as attacks that must be repelled if possible, or otherwise dismissed.

Policies and projects are actually processes – means to the ends of broad, inclusive, development. They are techniques that must be calibrated and adjusted continuously to get us to where we deserve to be as a nation.

Thus, any criticism that offers suggestions for improved methods of recalibrating these processes must be examined carefully, openly, and rigorously, and discarded only if upon scrutiny it is obvious that the promised improvement is ephemeral or unlikely.

Only a climate that encourages deep, rigorous, and rich debate can allow such attitudes to flourish. The media certainly has a role to play, and I pray that in 2019 they go to even greater length to encourage discussion on flaws and potential improvements of all Government policies, no matter how much politicians try to brand them as sensitive and vital to their re-election efforts.

Policies are not props for re-election, even if political marketing is made much easier if we treat policies as the exclusive intellectual property of ruling parties, to be defended at all cost in order to score political points, without regard to whether the policies can be made much better than they are through fearless exposure of their flaws.

And flaws are the natural features of all political instruments, since they reflect compromises across competing interests. Every government policy is likely to be full of flaws, some of them due to the way our institutions are set up and others due to competition among factions in government and society leading to contradictions held up as compromises. There is also the fact of principal-agent discord, which results in civil servants and politicians advancing the interests of tiny elites instead of the broader public interest.

For all these reasons, it is wise and prudent to automatically assume flaws in any new government policy and project, and aggressively expose them whilst proposing improvements. In the process of open, rich, debate, some of the improvements could hopefully be realised, and the whole system moved up a notch to generate policies with fewer flaws than before.

It is only through such an iterative, constant-improvement, culture that Ghanaian governments will get to a point where new policies show an improvement over past ones, thereby transforming the very quality of the system. Right now, we often see policies that are worse than the ones they are ostensibly replacing.

Many people nowadays look at the Asian economic success stories and completely miss the point. They argue that authoritarian state-led development models have shown that democratic debate can be stifled even at the same time as bureaucratic efficiency grows, leading to better overall development outcomes. This is a gross vulgarisation of what has happened in places like South Korea, Taiwan, China, Singapore and Vietnam.

True, all these countries during their development have had taboo topics over which public debate has been suppressed at one stage of their state evolution or the other. But all of them, once they commenced the process of economic reform and transformative development, emphasised strong policy debate.

They became learning states. Post – Deng Xiaoping China is most instructive in this regard. Anyone who pays any serious attention to actual Chinese policy discourse (as opposed to caricatures refracted through Western lenses) is immediately struck by the degree of depth and breadth of the scope of Chinese debate.

Chinese analysts compete for attention by pointing out flaws in grand government policy, and they benefit from an atmosphere of general reverence for intellectual hard work and heavy lifting. China’s government is teeming with committees upon committees that interact with non-Government analysts. Nor is it true that such debate is restricted to government-sanctioned Academia. Voices range from newspaper pundits to those rising up from the fast-emerging risk consulting landscape.

Of course, there are taboo topics, from Xinjiang to Tibet to Falun Gong, but restrictions almost always apply to attempts to mobilise actual political action in respect of these subjects and almost never to intellectual debate.

The Learning State is one where leaders take pride in being perpetual policy students, constantly refining their methods of problem-solving as they learn more from a broad array of sources. The state sector may itself become an apprentice to more dynamic sectors in order to hone its capacity, especially in emerging areas like digital technologies, where states everywhere are usually backward.

In Part II of this article, I provide examples to back my arguments that flaws are the natural features of Government policy, for which reason the automatic posture of every citizen should be to probe every Government policy for flaws, treating them as processes in search of solutions instead of as branded products of the ruling government, and then, to the limit of such citizens’ capacity, to offer suggestions for improvement.

Such a climate, far from creating obstruction to much needed progress, should rather encourage the growth of a Learning State that makes fewer mistakes over time, and solves social problems much more effectively with every new try.

In the first part of this two-part blogpost, I introduced an argument that Government policies and projects are not the “branded products of the ruling government”, but rather techniques and processes that aid in the search for solutions to the problems of broad, inclusive, development. Consequently, such techniques can only be refined by the fire of constant probing for flaws, faults and opportunities for improvement.

I characterised states whose leaders encourage this iterative search for enhanced problem-solving methods in an open, collective, manner without misguidedly treating the solution-search as an end in itself, exclusively linked to their political parties and their re-election goals, as learning or apprentice states. On the basis of this logic, I criticised President Akufo-Addo’s remarks misconstruing policy critique by Think Tanks as “attacks”, “bombs” and distractions of “little substance”.

In this installment of the blogpost, I would like to draw attention to a few “grand policy frameworks” of the current government that have received poor scrutiny and are therefore lumbering from one rung to the other in search of a foothold.

Notice that as far as my characterisation of policymaking is concerned, this tottering and lumbering is very natural. In fact, it is to be expected. Policies begin life as highly flawed instruments and are over time refined and recalibrated into more useful guideposts to the aims we seek as a society. Even seemingly noble policies can be shown to feature serious flaws in their premises or side effects. Politicians need not feel overly defensive about this universal reality.

The problem arises when policies are force-fed to the public through mass political marketing campaigns, treated as jewel-encrusted finished products fully birthed from the minds of genius leaders.

Partisan praise-singers are then mobilised to quash intellectual dissent, shield the policies from the continuous refinement of forceful debate, and then slowly reduce these yet-to-find their feet instruments into living fossils to be gawked at and fussed over.

One District One Factory

Such is the possible fate of the One District One Factory initiative should implementation continue without critical scrutiny at multiple levels.

First of all, the entire policy is based on long-held anxieties that without rapid, or even abrupt, industrialisation, Ghana is doomed. Some Government-favoured pundits talk about a spate of de-industrialisation that has rendered Ghana economically non-competitive, thus necessitating the establishment of factories in every corner of the country, on an emergency basis.

Many of the earnest framings of the issue are however neither backed by recent research and supported by the latest data nor reflective of the complex nuances on the ground.

The reality, in fact, is that the industry sector of the Ghanaian economy has been shown, following the careful work done during the rebasing effort, to have grown from 25.2% to 33.2%, whilst the share of the economy occupied by output in Services has declined from 56.2 percent to 45.6 percent.

Whilst there is considerable complexity in teasing out how the chaining of series from different base years impacts the exact linking of the trends to particular periods, the simple conclusion is that the “de-industrialisation” bogey that continues to haunt policy is simply not what it has been painted to be.

Equally important is the fact of the shrinking services sector, which may actually point to more worrying undercurrents than our obsession with de-industrialisation. Contrary to the thrust of Government thinking over the years, it is Services, not manufacturing, that truly create jobs.

This is why as every country grows its economic capacity, services far outpaces every other sector in terms of growth, sophistication and prominence.

In virtually all the advanced industrialised countries, services constitute 70% or more of GDP, with an even greater impact on job creation.

In South Korea, for instance, nearly 95% of all workers are dependent on the services sector according to some recent close-quarters studies. In Japan, the equivalent proportion is 82%. Even in Indonesia, China and India – long laggards in this trend – services is the fastest growing job-creation engine.

It is not all that difficult to understand the foundation of these trends. Manufacturing is becoming at one and the same time both highly automated (due to the greater role of precision technologies and digitilisation) and highly dependent on auxiliary services (such as firmware embedded in the microelectronics at the heart of automotive components). For example, researchers have found that in the leading European manufacturing economies, services-oriented exports considerably outpace manufacturing-oriented exports in terms of overall value addition.

Researchers at Deloitte have even estimated domestic value addition in German manufacturing-based exports at less than 70%, whilst service-based exports inch towards the 90% mark.

One major determinant in all of this is the quantity of imported inputs in manufacturing industries primed for export versus the intensity of local skills and knowhow in export-oriented service sectors (such as software development and design).

For example, Adjaye & Associates, the celebrated British architectural firm, contributes considerably to British exports without the need to import a lot of inputs due to the very nature of the design industries.

In the end, the real issue is “output”. Every economic activity can become high-output/high-productivity if the incentives exist for the right kinds of knowhow and capacity to be created. Manufacturing can become an economy-draining affair, as indeed it became in the mid-sixties and throughout the seventies in Ghana due to distortions caused by policy that bred serious inefficiencies. When services are allowed to degenerate to low-level, informal, activities on the fringe of the economy, overall job-creation prospects are greatly diminished.

What is fascinating however is that in the same decade that we have seen manufacturing enterprises in Ghana increase four-fold in number to nearly 100,000, even as the concurrent decline in competitiveness in the services sector has led to sluggish job-creation performance, we have suddenly zeroed in on a notion of “de-industrialisation” in order to justify a subsidy program for existing factories.

Clearly, the focus should not be on “factories” per se but on growing “capabilities” such as “design thinking”, “open fabrication systems”, “standards conformity”, “modularity”, “six sigma” etc etc. that are cross-cutting in their effects and can boost productivity and efficiency across enterprises, whether in the manufacturing or services sector. Clearly?

What is the point of scrambling around looking for subsidies to hand over to 254 manufacturing establishments (i.e. one for each district) on dubious criteria (how exactly did the current list of 79 “beneficiaries” come to be?) when we already have nearly 100,000 factories that are struggling to create jobs? And why must every district, whether or not it has the right conditions for manufacturing, be endowed with a Government-subsidised or subvented or enabled factory?

Even if you disagree with my conclusions, you surely would not argue that these are matters undeserving of much more debate than we have seen to date, would you?

Would you then call passionate suggestions for the improvement of the basic foundations of the 1D1F policy “substanceless”?

The Century Bond Saga

The Government of Ghana is mulling the issuance of 100-year bonds to finance important infrastructure projects. Yet another project that has seen virtually no scrutiny nor serious debate.

The long maturity of these proposed instruments is being presented as beneficial for our debt sustainability.

Because Ghana’s public borrowing has consistently exhibited an “upward sloping yield curve”, we can be sure however that this bond would be more expensive than the 30-year bonds we have been issuing. That is to say, instead of the 8.627% we paid for the latest 30-year bonds we issued, we may end up paying in excess of 10% for the coupon rate.

The impression one gets from reading government analysis of the proposed arrangement, at least from the snippets in which such analysis is usually dispensed in Ghana, is that by deferring payment of the principal for a hundred years, we automatically improve debt sustainability.

This “benefit”, unfortunately, is plainly ephemeral since our practice has been to “refinance” the bulk of our debts with new borrowing when the principal comes due. In that sense, our current long-term borrowing strategy amounts to a chaining of debts in order to evergreen maturity, the character of which is not that dissimilar from the super-longterm arrangement we are currently proposing.

The difference – the very critical difference – however, is that we do not lock in interest rates for ridiculous lengths of time in our current strategy, and in recent rounds of refinancing we have been able to benefit from improved terms due to positive changes in the market.

A counter-argument that would most certainly be made is that we can embed a call provision in the bond enabling us to refinance when rate conditions improve. Sure we can, but “callables” always come at an additional cost and they are almost never “at-will”, thereby limiting their flexibility.

The fact that routine debt servicing has been a bigger problem for us than principal redemption counsels against the use of super-longterm borrowing measures if it also means higher rates.

Once again, there could be alternative views justifying a completely different framing of the issue than that presented here, but who in their right mind can argue that:

  1. We have had anything approaching a serious debate on this matter of a century bond;
  2. Or that such a debate, exposing as many flaws in design of the inchoate policy as possible, can be anything other than salutary for Ghana through the learning outcomes it can induce?

Why should criticisms, scrutiny, fault-pointing, flaw-probing, and even passionate disagreements over the direction of state policy as exemplified in the above two mini case studies excite anything other than careful examination among Ghanaian policymakers?

Why should any President feel that these kinds of criticisms are distractions in the way of progress to be paid little heed or dismissed as “attacks” and “bombs” of “little substance”?

Would you consider it presumptuous if I were to say that President Akufo-Addo has been grossly unfair to Ghanaian think tanks?