By Appiah Kusi Adomako, CUTS Ghana
Ghana Web, February 20, 2017
Every government since the start of the Fourth Republic has identified the private sector as an engine for inclusive economic growth. Data from the Ghana Statistical Service indicates that the private sector’s contribution to the GDP has seen exponential growth over the past decades. With government ambitiously pursuing Public Private Partnerships (PPP) for infrastructure development, it is estimated that private capital and private sector share of the economy would increase thereby creating more jobs and bringing in revenue for the government.
In spite of the plethora of the private sector’s contribution to the economy, the sector is bedevilled with an avalanche of issues ranging from poor business operating environment to high cost of credit. In some instances, the enabling laws and regulations are absent making it difficult for the smooth operations of the same. For example, the sector has to compete with the government for credit making the cost of credit expensive. High cost of credit is translated into high cost of operating which in turn makes the goods and services expensive, thereby rendering the Ghanaian private sector not competitive in the sub-region.
High Cost of Private Sector Advocacy
Some actions and inactions of the government may have a costly impact on the development of the private sector. The question is: why is the government not doing whatever is needful to make the private sector thrive knowing well the contribution and the potency of the sector? In most cases, it takes business associations, CSOs and professional bodies to get the government to pass the appropriate law or implement effectively an existing law. For an example, it was the BUSAC Fund which funded the advocacy action of the Ghana Institute of Engineers that produced the Engineering Council ACT 819 which is meant to establish an engineering council as a corporate body with the objective of ensuring that the highest professional engineering standards are used all the time.
In an environment where a lot of resources go into evidence -based advocacy, many business associations, community based organizations, farmers, CSOs, may not be able to have the financial fluid mechanism to engage and affect policy to attain the desirable outcome. It is public knowledge that government does not fund CSOs activities and with dwindling donor support, it is possible that essential issues would not get the attention of the appropriate institution.
Over the past ten years, the Business Sector Advocacy Challenge Fund (BUSAC Fund) has been in existence to help promote public- private dialogue and create an enabling business environment for an inclusive growth. Funded by USAID, EU and DANIDA as the lead development partner, the BUSAC Fund over the years has supported over 700 grantees nationwide to advocate the removal of barriers in the business environment at the district, regional and national levels. The Fund is managed by an international management consulting firm called COWI, with Nicolas Gebara as the Fund Manager.
Between 2004 and 2015, the BUSAC Fund provided a total of 271 advocacy grants to agricultural sector-based business associations to enable them advocate the removal of constraints related to agricultural inputs, extension service delivery, infrastructure (markets, access roads, irrigation dams, industrial sites, etc), enforcement of regulations and standards, access to land, etc.
The Fund also provided funding to the Ghana Employers’ Association for a project dubbed building a culture of voluntary compliance with labour standards in all workplaces.
As an organization, CUTS Ghana in July 2014 received funding from the BUSAC Fund to advocate for functional competition policy. The main goal of the project was to complement the Government of Ghana’s efforts towards evolving a functional national competition policy and law in Ghana, through an informed process, incorporating the views of key actors and with public support. Through the project, CUTS Ghana worked closely with senior policymakers, Parliamentarians and business leaders to deepen their understanding on the benefits of a functional competition regime. Now the Ministry of Trade and Industry (MOTI) has been able to draft National Competition Policy which is before cabinet and hopes it would be approved before the end of the first quarter this year.
CUTS was of the strong view that an enactment of a national competition policy and law infuses a ‘level playing field’ in key markets and enhances the predictability and certainty in the market, thereby stimulating entrepreneurship and economic growth which becomes a win-win for both consumers and producers.
The objective of a functional competition regime is to promote competition, and contribute towards increased efficiency and curb anti-competitive practices in the market. Anti-competitive practices including cartels, abusive monopolies, predatory pricing, collusive tendering, exclusive market sharing agreements, bid rigging etc. These practices have negative effects on both consumers and producers. Certainly, a well-enforced competition regime reduces uncertainty for businesses and is an important element of promoting private sector development.
In competitive environments, firms are pushed to be innovative and find better and more efficient ways to produce and distribute goods and services. Businesses tend to benefit from a well-enforced competition law, for instance, through cheaper (not overpriced) inputs and indirectly from an enabling business environment.
A public-private dialogue and partnership is essential in attaining the Sustainable Development Goals (SDGs). It is the aspiration of many Ghanaians in the private sector that the new government would be responsive to the needs of the private sector. Going forward and when donor funded projects like BUSAC Fund and STAR Ghana are gone, Ghanaian businesses should be able to sustain the steam momentum by supporting CSOs in their evidence-based advocacies.
Editor’s note: The authors is the Country Director for CUTS Ghana, a public policy research and advocacy think tank. For more information visit www.cuts-accra.org or email@example.com or 0302.245652 or 024-392-0926.
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