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British HC urges SMEs to consider Ghana

Interview - August 18, 2014
“We have over 10 government departments represented here in the British High Commission. We don’t have people here lightly; we all have a real job to do. The High Commission setup is an illustration of just how wide the relationship is,” British High Commissioner to Ghana Jon Benjamin says in this interview with PM. He also discusses raising awareness about Ghana amongst British SMEs and the signing of the partnership agreement between the EU and the Economic Community of West African states (ECOWAS), which he agrees will help to spur further industrialisation of Ghana, which is an ECOWAS member.
Could you start by outlining Ghanaian-British relations from a UK perspective?

It is a very wide-ranging relationship because of our long shared history, including of course the controversial aspects of colonialism. But we have a very close 200-year association, and our relationship is not only about government-to-government links but, unlike in many other bilateral relations, we have also got a huge network of interpersonal, human contact. For example, there is the British-Ghanaian diaspora in the UK who number into the hundreds of thousands. That gives a huge underpinning of non-governmental glue. Even in the governmental sphere, we have political, military, economic, commercial, developmental, social, cultural and sporting bonds, which are very wide-ranging. We have over 10 government departments represented here in the British High Commission. We don’t have people here lightly; we all have a real job to do. The High Commission setup is an illustration of just how wide the relationship is.

During a speech on Her Majesty the Queen’s birthday, you said the UK had experiences of dealing with financial problems it could share with Ghana. So what can Ghana learn from how the British government has tried to deal with its own financial problems in recent years?

The main thing is that these are general lessons for all of us. The bottom line is that the government, any government, should get its budget under control. It is mainly about budgetary discipline and getting the financial house in order. Governments should also do the right things to promote the private sector, so that they can function as the motor for growth, create employment, and attract investment. This is a universal point, not specific to the UK or Ghana. The UK has just come out of the crisis and regained the economic size we had before it started. There are lessons from how we did that which could be useful elsewhere. There are now some macro-economic issues of concern here, but in the long term, it’s important to keep in mind that Ghana has a very promising future.

You spoke recently about bilateral annual trade exceeding 1 billion pounds…

We are around that value for goods and services combined and in both directions. We hope that will increase. It is easy to set targets, but you want to see growth at least in line with general economic indicators.

Hopefully, the economic partnership agreement with the EU will promote that.

The High Level Prosperity Partnership between Ghana and the UK supports this as well…

Yes, and it is a process I keep under regular review with Ghana’s Foreign Minister, Hanna Tetteh. It is about both governments discussing and being clear about what they need to do to create the most favourable environment for greater mutual prosperity. Sometimes that is just removing red tape and about better regulation. Governments create the rules of the game, and oversee them, so that is what we try to do, in a way that best favours a positive business environment and increasing trade between us.

When we sat down with Honourable Hanna Tetteh, Minister for Foreign Affairs and Regional Integration, she said the Economic Partnership Agreement with the EU will help to industrialise the region. Would you agree with that?

Yes, very much so. There are a number of misconceptions about the EPA. First, it is not completely new. It is evolving from already existing arrangements. The bottom line is that virtually all Ghanaian products that go into the EU under the EPA will continue to be quota and tariff free. Effectively, everything Ghana exports can go into EU without tariffs. To those who oppose EPA, the question is: do they actually want more tariffs which would make Ghana’s exports much more expensive and therefore uncompetitive? I just don’t understand that argument. How does that help people employed in the export sector? In fact, it will make them unemployed. So, that opposition is just illogical to me.

It is important to remember that, in recognition of Ghana’s current state of economic development, the EPA is not a symmetrical agreement. 100% of Ghanaian goods go to the EU tariff free, but currently only 35% of EU exports are tariff free into Ghana. At the end of 20 years, that 35% figure will become 75%, meaning that, even then, still 25% of European imports will have tariffs and quotas imposed on them, allowing Ghana to protect some of its most vulnerable sectors and the government can decide what those sectors are. The EPA has regular review periods during which the government can propose changes if it doesn’t like the way it is evolving in practice. Overall, I think those are all good terms for Ghana.

The UK is one of the most pro-free trade countries on the planet, because we think free trade increases global prosperity. For Ghana, developing the manufacturing industry is important as a way of encouraging more value being added to raw products from Ghana before they leave here. There is great potential for value added production here. For example, a British company called Blue Skies cuts and packs fruit here and ships it to British supermarkets. So, they add real value here and employ a lot of people directly, as well as indirectly in the farming community. Unfortunately, Blue Skies is the exception, not the rule. It of course takes time to develop value added processes here but, under the EPA, once value added products have been produced here, they can still be exported to the UK free of tariffs. With oil coming on stream, another opportunity could be around refining some of that in Ghana. These are long term questions, but there is much scope for value added in Ghana.

You mentioned Blue Skies and the oil sector’s potential. Apart from value added, what is Ghana expecting from British investors?

Better employment prospects and investments in human capital. For example, Tullow Oil are sending Ghanaian oil engineers on scholarships in the UK. Those people then come back into key jobs and transmit their knowledge to others. The most important thing is employment. Each person employed can support a family, and hopefully have sufficient disposable income to spend in the wider economy and, indirectly, thereby create more employment.

Ghana will be taking part in The Global African Investment Summit in London this October, alongside Togo, Rwanda, Tanzania and Ghana. In the areas to be discussed – agribusiness, natural resources, power and infrastructure – how do you think Ghana will stand out as a destination for investment?

It is stable politically. It is an open society. There is transparent, open democracy with the rule of law, a functioning judicial system, and clear laws for investors. Ghana has got all that. It is not only about the Ghanaian market itself though, but about using Ghana as a base for the wider region, and that is also an attraction. Have a look at the track record of companies that have invested here. There are lots of encouraging stories, even though there are some challenges at present.

Obviously, all foreign investors look at the wider economic picture in making their investment decisions. Foreign investment is very competitive and goes where it can be most successful. Many people in Ghana would like to see the British-Ghanaian community invest more here. That’s a great aspiration, but don’t forget that British-Ghanaian would-be investors are also entrepreneurs. They are not charities. They might have an emotional attachment to Ghana, but their investment decisions will depend on potential profitability and the ability to operate effectively here. That calculation is the same anywhere for any investor. We hope that in Ghana the government can do whatever they can to make that investment environment more favourable. Indeed, that is a key role of any government anywhere, and it’s the way of attracting investment into the country in ever greater amounts.

Ghana is now a lower-middle income economy with aspirations to become a higher-middle income economy in the years to come. How is this reflected in your development policies here?

We are still one of Ghana’s major development partners. If you add our bilateral aid and our proportion of EU aid (the UK counts for 16% of EU assistance and a smaller percentage of World Bank, IMF, UN etc assistance), we contribute with more than 100 million pounds a year. There are big contributions we still make in ‘classic’ development areas like education and health. But we are also working to improve the general business environment, for example by supporting SME development; and our efforts include working with the government to combat corruption and to promote better governance.

I came to Ghana from Chile which is an example of what used to be a developing country now giving aid to others. There are many other examples, like South Korea, and Singapore. Our desire for Ghana is no different than in those countries, namely that it should continue its positive development trajectory, consolidate its middle-income status and eventually become fully developed. As that process works through, the idea is that development assistance reduces over time and becomes less important, against the background of much greater economic prosperity. That is the trajectory we want to see over a long period. But, in the meantime, we will continue to be one of the major donor partners here, and happily so. The story of economic development around the world gives plenty of examples of countries going down both right and wrong paths for Ghana to look at.

We travel all over the world and try to get to know the people who matter. You are the new face of the British government here. On your Twitter handle, you describe yourself as a linguist, traveller, and suffering West Ham fan. Could you tell us more about yourself?

I am from London. I have been in Foreign Service for nearly 30 years. Unlike other countries, all of our ambassadors and high commissioners are career diplomats. So, the foreign service has been almost all my working like. I’ve worked in Australia, Indonesia, Turkey, Central Asia, the US, Chile, and now here. I picked up a few languages along the way. I haven’t worked in Africa before. My philosophy is that life is short, so I love this career because it divides your life into three or four-year segments. It makes life intense, rich, full and varied. Just before coming to Ghana, I got married and acquired a family. So, this is a different experience for me from previous postings. I’m at a very happy stage in my life, and this new chapter in Ghana plays an important role in that.

What is the most enriching part of being in Ghana?

I know a lot of people in Europe who say that Africa really gets under your skin. I’m still a novice but I’m very open to joining their ranks! I can see that there is a different way of looking at things here. I also see a very young, optimistic, ambitious, active population. It is great to try and make a tiny contribution to people trying to make a brighter future.

Sometimes Europeans have a tendency to look at the African continent as one unit…

Part of the British strategy for economic recovery is to generate more exports, trade, and investment. Ignorance in the literal meaning of the word – i.e. just not knowing – is just one problem we face. Britain has a relatively poor record in terms of the percentage of our SMEs that export. One of the big strategic aims is to get a much higher percentage of SMEs exporting. That involves a lot of work and a lot of awareness-raising. An important role we have is to communicate commercial opportunities here, and get people to come have a look and get involved. We can be catalysts for people to know more about Ghana and the whole of Africa. One of the problems is that many of the new stories that come out about Africa are bad. Unfortunately, there are indeed still some real problems, and major conflicts, in some parts of Africa, but that can really obscure the good news in other places. Part of our job is, without exaggeration, to tell the good news part of the story as well. Bad news can overshadow good news but the good news is there, and Ghana is a good example of that.

What are the most important things that remain unknown about Ghana in the UK?

I think the problem is that most SMEs don’t even think about coming to Ghana in the first place as they know too little about it. Our job is first to get them to think about coming here. Once they do, we can help them meet the right people and opportunities. One way in which we are doing that is by revamping the concept of the Chamber of Commerce. Our idea is to move towards an organization that proactively goes out and looks for people and opportunities. We are using taxpayers’ money to fund this initially, so we want to show that it is a worthwhile investment.

The country is now facing quite challenging times, but most economists we have spoken to have elaborated on the brilliant medium- and long-term prospects for Ghana. As the representative of the UK here, what would be your message about the prospects for Ghana?

Investment is not about today or tomorrow, it is long term. In that sense, Ghana, way beyond its immediate economic challenges, has terrific prospects. It has got oil, it is the world’s second largest cocoa producer, and it has got gold. It also has potential to go beyond that reliance on primary products to be a centre for the wider region. It has got an educated, young population. Even with the current economic difficulties, we estimate it will have 4-5 % growth this year. In a way, it is ironic to talk about economic problems when there are lots of countries around the world who would be more than happy to have 5% growth right now.

The image that a country has goes in cycles. In 2011, Ghana had the world’s second highest economic growth rate of over 10%. People remember that, and Ghana became the poster child for the ‘Africa rising’ narrative. Nevertheless, that narrative is misleading because there are many different stories in different parts of Africa. People sometimes over-exaggerate the positive but then become apocalyptically negative when times get relatively harder in the short term, as is the case right now. It’s important to look at the line on the graph over a very long period – Ghana is demonstrably on the right long-term trajectory.

So, the long-term prospects remain promising for Ghana, particularly now with the IMF working with Ghana’s government on short-term problems. The universal issue also applicable here is about the government not spending more than it has, and thereby reducing fiscal deficits and the national debt. Ghana has worked with the IMF before, and now there will no doubt be certain additional measures to control spending. We support that approach as it restores business confidence and maximises growth potential in the future.

Thank you very much.

Follow the UK High Commissioner to Ghana and non-resident Ambassador to Togo, Benin and Burkina Faso on Twitter: @JonBenjamin19