National Suppliers development programme to economic linkages – Veep
Vice President Dr Mahamudu Bawumia says the National Suppliers’ Development Programme (NSDP) would serve as a Launchpad to stimulate economic linkages to make Ghana a supply hub for large mining companies operating in Ghana and the sub-region.
He said the programme would support the development of world-class and competitive supply chains in Ghana that would in turn lead to the creation of the hub.
He made the statements in a keynote address delivered on his behalf by Mr George Gyan-Baffour, Minister of Planning, to launch the National Suppliers’ Development Programme in Accra on Thursday.
He noted that the NSPD’s core functions would be to help Ghana to take advantage of the opportunity to benefit from in-country spending by the mining industry which local companies had hitherto not been able to exploit. An estimated $1.2 billion dollars is spent annually on operational expenses in Ghana, approximately three percent of Ghana’s GDP.
“The value of in-country spending by the mining industry is a low-hanging fruit that we reap very quickly and which can be a critical catalyst to industrial development,” he said.
Dr Bawumia said the government, under NSDP was also committed to breaking the silos within which the mining industry had traditionally operated.
He said while the sector had some special need, it was solid enough to provide business opportunities for the domestic private sector.
“We facilitate more investments, business partnerships, Joint Ventures and replace red tapes with carpets to make business less costly and improve the competitiveness of our industries,” he stated, adding that the programme would support local businesses in addressing critical supply side constraints and provide tailor-made support to address technical challenges affecting their ability to compete with imported goods.
He pledged government’s commitment to ensure a sufficiently strong institutional mechanism to guide the core functions of the programme and also ensure that its outcomes were consistent with the ambitions of government to make Ghana a prosperous nation.
Mr Kojo Busia, Coordinator of the Africa Minerals Development Centre (AMDC), said it was increasingly clear that Ghana and Africa had not harnessed its mineral wealth for its development as its economies continued to rely on the extraction of raw materials, years after its independence.
The extraction and export of raw materials, he noted, represented the lowest segment of the value chain of mineral resources as the value of processed products was typically worth 400 times more than the equivalent unit by weight of the raw materials needed to produce them.
At the same time, the manufactured inputs and business services which feed into Africa’s extractive sectors like wiring, steel, IT services and others, are all largely sourced abroad.
“It is time to look at how these mechanisms can be put in place to end this destructive cycle” he stated, noting that the African Mining Vision (AMV) adopted by African Heads of States was the continent’s agenda for an inclusive, mineral-based transformation and the only one which approached minerals from an inclusive development approach rather than an extraction and rent maximisation approach.
Mr Busia noted that several factors limited the space for domestic value addition in the sector including entrenched supplier networks, bargaining of established multinationals and agreements not favourable to national governments.
Thus the need to enhance existing local content policies at both national and industry levels through the NSDP which aims at identifying the clearest opportunities in linking Ghanaian firms into local and global value chains.
He said the AMDC and the Bundesanstalt für Geowissenschaften und Rohstoffe (BGR), the German Federal Institute for Geosciences and Natural Resources, had identified some high value items, which with the proper supporting environment could be produced in Ghana.
He added that a comprehensive National Suppliers Development Programme would help to build the right kind of skills and capabilities among local firms in order to help them produce to the scale, quality and cost expected by international mining firms.
“In the latter stages, the NSDP will aim to expand its scope to the downstream gold and mineral beneficiation as well as value addition in the petrochemical industry,” he said
Mr Robert Ahomka Lindsay, Deputy Minister of Trade and Industry, noted that while the initiative to have a Suppliers Development Programme for the mining sector was laudable, it was also necessary to have a comprehensive suppliers development programme that cut across all sectors of the economy.
“What we need to do as government is work with all of you to ensure that we have a national suppliers programme that caters for all the different key sectors such as the mining industry, petrochemical industry, and fast-moving consumer goods industry,” he said adding that the NSDP for the mining sector could be worked on produce a ‘truly national suppliers development programme”