‘Bureaucratic, corrupt’ public sector is failing Ghana’s private businesses – Experts

The operations of state institutions is said to be tampering with the smooth administration of private sector businesses in Ghana, clichéd to be the ‘engine of growth’.

In a documentary titled “Ghana Business Report: How the Public Sector is failing business” and produced by Channel Two Communications – a Ghanaian media firm, leading private business personalities expressed worry about how the public sector is failing businesses in the country.

It is believed that Ghana’s fast-growing private sector could be growing a lot faster if it had a dynamic and efficient public sector to depend on.

Mr. John Awuni is Corporate Affairs Director at Finatrade, a major rice importer in Ghana and he has some strong words on the behaviour of the country’s public sector institutions.

Mr. Awuni says “Bureaucracy is good for discipline. But people have used bureaucracy now as a vehicle to exploit, to extort, to corrupt and to defraud” people despite Ghana being upheld as a beacon of sound economic growth in Africa.

According to Mr. Awuni, the public sector is ‘divorced’ and ‘alienated’ from the private sector, and the private sector is literally at the beck and call of the public sector.

He argues that “inefficiency aside, red tape and cumbersome bureaucracy is choking the system.”

“The issue of permits. It takes you endless efforts to get permits. A company that is repackaging rice, for example is aware that you need to get a Food and Drugs Board (FDB) permit, a Ghana Standards Board permit, an EPA permit. You get them all and think you’re done and operating perfectly. Then one day the Factory Inspection Unit, from nowhere, appears and tells you that you need to get a particular permit. And say if you don’t produce the permit, we’ll shut you down.  Indeed, at the end of the day, when you look at all the permits you’re supposed to acquire, the cost is outrageous,” said Mr. Awuni.

Ghana fell three places to 63rd in the World Bank/ International Finance Corporation (IFC) Doing Business 2012 report. The reason for Ghana’s fall on the rankings was due to the increase in cost of starting a business in the country.

The country fell by 19 places from 85 in the previous year to 104 on the Starting a Business ranking. “Ghana increased the cost to start a business by 70%,” said the report.

Under the Starting a Business ranking, it takes seven procedures within 12 days at a 17.3% cost per capita income at a minimum capital of 5.5% of income per capita in Ghana.

Mr. Awuni continues in the documentary that “Every public sector worker has privatised his or her corner. As we speak now, somebody is picking money from somebody for a land document to be registered. Somebody is picking money from somebody for some meters to be released; somebody is picking money from somebody for a container to be released at the port. Somebody is picking money from somebody for a driving license to be issued. Are we saying we’re not aware about this?”

Ghana was ranked 69 out of 182 countries on Transparency International’s 2011 Corruption Perceptions Index (CPI) released December 1, 2011.

Out of the overall 10 score points which perceives a country as least corrupt, Ghana scored 3.9 points as the report says “the vast majority of the 183 countries and territories assessed scored below five on a scale of 0 (highly corrupt) to 10 (very clean).”

Recent findings released December 9, 2011 by the Ghana Integrity Initiative (GII), the local chapter of Transparency International, showed that the Ghana Police Service, Customs Service and political parties were said to be institutions perceived to be most corrupt in the country.

“What we’re experiencing is complete systemic collapse, systemic failure, that no one wants to confront…We talk about good governance just in theory. I don’t see how good governance can be achieved on the platform of failed systems,” said Mr. Awuni.

Economists and to a large extent government, know that the behaviour put up by public sector officials is because in general, they are underpaid, unmotivated and largely inefficient.

Lamenting on the situation, Dr. Paa Kwesi Nduom, an International Management Consultant and former Minister for Public Sector Reforms in the erstwhile Kufuor administration, said “How bad is it? Go to the ports. How bad is it? Go and try and get a passport. How bad is it? People can go and get three or four different driving licenses. People park their car anywhere. Cause deaths, and walk away. You have people in offices that come in when they like and go home when they like.”

Dr. Nduom noted that the private sector in the economy needs the state to be the arbiter. He said the state should be the one which brings the rules and regulations as well as ensuring that there is equal opportunity.

“Who ensures that everybody has a chance? But the one who also ensures that the entrepreneurs, the professionals, have what it takes in order for them to succeed,” he said.

Enterprises anywhere in the world are said to be drivers of a country’s economy with the delivery of services and products, whether in the fields of agriculture, mining, manufacturing or commerce. In addition, the private sector creates wealth, employment, skills and sustainable development.

Dr. Ndoum, who is also a business mogul, owning businesses in the financial, hospitability as well as other sectors, believes that the intensity of private business activity is very necessary, and their efficiency is very necessary.

“The value of all those goods and services is very necessary – because that’s what moves a nation,” he said.

“When the bureaucracy, the machinery, is weak, is not efficient, is backward – nothing works.  And it takes leadership to recognise that that is the problem,” he added.

Mr. Martyn Mensah, Managing Director of Kasapreko Company Limited, producers of alcoholic and non-alcoholic drinks in Ghana, observed that the public sector, which should play the role as the implementer of government policy and the facilitator of service delivery, is failing “hopelessly”.

“To be honest, there are some successfully aggressive and proactive agencies. Almost everybody else – and it’s a sad thing to say – almost every other agency is a hindrance. We see them as putting impediments in our way and we have to work around them all the time,” said Mr. Mensah.

“Typically what I’m finding more and more every day is that business people are learning to cope without government. Therefore we miss the benefit that we could derive from having government as a stakeholder who sees itself as a partner, as opposed to only a regulator – and that’s a fine distinction,” he adds.

Mr. Mensah noted that there is corruption in every system in the world, but where it becomes a problem is when it is part of the cost of doing business, adding, “it’s a significant cost that doesn’t appear in any books…and therefore it becomes very difficult to root out.”

“You can’t see it. Everyone denies giving bribes, but there’s no company in Ghana that can operate on a day to day basis without at some level – from the lowest to the highest – coming across this problem and having to make a judgment call,” he observed, quizzing, “Do I do this and get on with business? Or say no, and watch things turn the other way? It’s a very difficult place to put business people in.”

On the way forward to make the relationship between both sectors (private and public) work closely, Mr. Martin Mensah said the country needs a non-partisan workforce that survives regime change, and delivers continuity.

For John Awuni and Dr. Ndoum, leadership is the answer to everything.

“The earlier Governments sit up, the earlier leaders sit up – those who think they have the interest of the country at heart – and confront the issue head on, the better,” said Awuni.

“But it is us – the people, who are allowing people to go and sit there, in Government, in charge -who don’t produce the results that we want. And we accept it. When we decide that enough is enough – we want change – we want reform – it will come,” Dr Nduom stressed.

Kwami Adobor, Director of Administration at the Public Sector Reform Secretariat believes the public service needs to be resourced and government must see the Civil Service and the Public Service as partners.

By Ekow Quandzie

Watch the Ghana Business Report: “How the Public Sector is failing business”