77
NORTHERN SAVANNAH ECOLOGICAL ZONE SOCIO-ECONOMIC WORKSHOP TAMALE 30 March 2016
NORTHERN SAVANNAH ECOLOGICAL ZONESOCIO-ECONOMIC WORKSHOP
TAMALE
30 March 2016
OUTLINE OF WORKSHOP
Agenda
1) Introduction to NSEZ Economic and Social Indicators
2) Options for Transformation – The Vision for Change
3) The Challenge of Transformation
4) The Way Forward – A Strategy for Implementation
5) The Economic Impact of Transformation
6) Comments and Feedback
Presentation
On
NSEZ
Key IssuesOptions
For
Consideration
Choosing the
Appropriate
Strategy
THE APPROACH
ACKNOWLEDGEMENT
The data for this analysis has been derived from
various sources. The socio-economic team from
Surbana would like to acknowledge the feedback and
data supplied by the TCPD and the Savannah
Accelerated Development Authority. The Spatial
Development Framework of SADA forms the
backdrop for the data, in addition to that from the
Ghana Statistical Service (where applicable).
PART ONE
THIS IS THE EASY PART
I NSEZ ECONOMIC AND SOME SOCIAL INDICATORS
THE NSEZ CONSTITUTES AROUND THIRTEEN PERCENT* OF GHANA’S ECONOMY
7
Source: Sreekumar Siddique estimates based on data from Ghana Statistical Service
*Note; Estimate based on agricultural productivity at 50 % in the Savannah Zone
IT IS LARGELY AGRICULTURAL WITH LITTLE INDUSTRY OR SERVICES
8
Source: Sreekumar Siddique estimates derived from GSS data
AND HAS AN ESTIMATED POPULATION OF 5.7 MILLION TODAY
9
Source: Sreekumar Siddique estimates derived from GSS data
NORTHERN AREA DOMINATES THE NSEZ ECONOMY
10
Source: Sreekumar Siddique estimates derived from GSS data
THERE HAS BEEN A SLOW BUT STEADY CHANGE IN THE SEX RATIO
Source: GSS
THE NSEZ HAS A YOUNG POPULATION
Source: GSS
MOST AREAS SHOW INCREASING LEVELS OF URBANIZATION
Source: GSS
INTERNET USAGE IS COMMENDABLE
Source: GSS
WHILE MOBILE PHONE USAGE HAS BEEN EVEN BETTER
Source: GSS
II OPTIONS FOR TRANSFORMATIONTHE VISION FOR CHANGE
TRANSFORMATION IN NSEZ HAS TO COME THROUGH CATALYTIC CHANGE
17
AGRICULTURE
1.Crop Selection
2.Large-scale plantation
3.New farming technology
4.Mechanization
5. Digital Information
dissemination
6.Downstream processing
MANUFACTURING
1.Creation of SEZ
2.Setting up FTZs or
Distriparks
3.Attracting private sector
participation
4.Creating local industry
linkages
5. Improving connectivity
across NSEZ
6. Resource processing
SERVICES
1. New Digital Clusters
2. Agricultural knowledge
dissemination
3. Logistics hub
4. Medical Centre
5. Education Centre
6. Business services
7. Tourism development
THERE MUST BE THREE DISTINCT THRUSTS FOR A SUSTAINED ECONOMIC TRANSFORMATION OF NSEZ
18
Agriculture
Services
Manufacturing
Sustained
Economic
Transformation
of
NSEZ
THESE NEED TO BE INTEGRATED FOR EFFICIENT ECONOMIC MANAGEMENT
19
Selective
Agricultural
Production
Processing/
Manufacturing
Services
Extension, finance, logistics, trade, etc
Domestic
market
Export
markets
MiningTourism
WHILE BECOMING NETWORKED TO EASE ECONOMIC TRANSFORMATION
20
Tamale
Buipe
Kintamp
o
Wa
Bolga
Yendi
Kete
Krachi
SO THAT NSEZ BECOMES A PRODUCTIVE ECONOMIC BASIN FOR DOMESTIC AND REGIONAL MARKETS
21
NSEZ
B FASO
NIGER
BENIN
TOGO
COTE
d’IVOIRE
SOUTHERN GHANA
To Mali
STRENGTHEN AGRICULTURE
AGRICULTURE WILL CONTINUE TO BE THE BASE OF THE NSEZ ECONOMIC STRUCTURE
23
NSEZ AGRICULTURECassava
Millet
Gari
Soy beans
Cashew nuts
Yams
Groundnuts
Maize
Shea nuts
Mango
Pineapple
Aquaculture
Rice
Guinea fowl
Bee keeping
Cattle farming
Source: various
ENMESHED WITH DOWNSTREAM PROCESSING TO ADD VALUE
24
Cassava, yam
Maize, Sorghum,
Rice
Groundnuts,
Shea nuts
Flour production
Oil extraction,
Milling, Soaps
Fruits
Mango,
pineapple
Concentrate
production, drying,
pickles, jams, etc
Milling, flour and
flake production
Agricultural production Processing/Manufacturing
AND SUPPORT FOOD SECURITY, EXPORT POTENTIAL AND SKILLS CREATION
25
POTENTIAL DOMESTIC INDUSTRY
Rice milling
Frozen poultry
Tomato concentrates, paste
Dairy products
Food and Beverage
Cassava and yam flour production
Cashew salting, roasting
Fruit concentrates – mango and pineapple
Millet and maize flour production
Ground nut oil milling
Shea nut butter soaps, wound healing creams
WHILE CREATING A “DIGITISED” AGRICULTURAL ECONOMY
AGRICULTURAL
PRODUCTION
PROCESSING/
MANUFACTURING
PRICES
HARVESTFERTILIZER
SOIL DATA
WEATHER CROP
ADVICE
LOGISTICS
STORAGE
PAYMENTS PAYMENTS
The outer ring consists of digitally delivered information or transactions.
26
EXPAND TRADE
TRADE WITH NEIGHBOURS (ECOWAS) IS A SMALL PORTION (7.3 PERCENT) OF GHANA’S TOTAL TRADE*
28
Source: Ghana Statistical Service
* Total trade is defined as exports plus imports
Ghana Total Trade*
GhC 49.7 bn in 2013
NIGERIA, BURKINA FASO, TOGO, BENIN AND COTE d’IVOIRE ARE THE MAIN PARTNERS WITHIN THE ECOWAS NETWORK
29Source: Ghana Statistical Service
BUT THESE AND OTHER IMMEDIATE NEIGHBOURS HAVE SHOWN RESILIENT GROWTH IN RECENT YEARS
30
Source: UN database
WITH A SUSTAINED INCREASE IN GDP PER CAPITA
31
Source: UN database
THERE IS AN ESTIMATED 31 MILLION PEOPLE IN THE MIDDLE CLASS* IN GHANA AND ITS IMMEDIATE NEIGHBOURS
32
Source: Sreekumar Siddique analysis with data from the African Development Bank
*Middle Class defined as those earning between USD 4 and USD 20 per day
WHERE MOBILE TELEPHONY HAS SHOWN RAPID GROWTH
33
Source: UN database
ACCOMPANIED BY A RISE IN INTERNET USAGE
34
Source: UN database
NOT SURPRISINGLY THEN, THESE NEIGHBOURS IMPORT MOSTLY CONSUMER GOODS FROM GHANA
35
Source: WITS, World Bank
WHICH CAN BE EXPECTED TO GROW IN TANDEM WITH THE RISE IN THE MIDDLE CLASS AND GDP PER CAPITA
36
Source: Sreekumar Siddique analysis; grouped average growth rate of 5.4 percent per year
SEVEN TYPES OF CONSUMER GOODS DOMINATE THE IMPORT TRADE BETWEEN GHANA AND ITS IMMEDIATE NEIGHBOURS
37
ITEM B FASO COTE
D’IVOIRE
TOGO NIGER BENIN NIGERIA
Textiles,
Clothing
4 1 5 6 1 3
Electrical
Goods
2 7 1 4 3 7
Food Products 3 2 2 3 5 1
Plastic, Rubber 1 4 4 2 4 4
Vegetables 5 3 3 1 2 2
Footwear 7 5 7 7 6 6
Stone, Glass 6 6 6 5 7 5
IMPORTED CONSUMER GOODS FROM GHANA – IMPORTANCE BY RANK (2013)
Source: Sreekumar Siddique analysis using data from WITS (World Bank)
MANUFACTURING AND SERVICES
A NEW IMPETUS FOR MANUFACTURING AND SERVICES MUST NOW BE CREATED
39
MANUFACTURING
Textiles, Garments
Plastics, Rubber
Footwear
Food products
Flour milling
Oil milling
Stone, glass
Light metal products
Vehicle assembly
SERVICES
Multi-modal logistics
Agricultural Extension
Finance, Insurance
Digital business services
Medical service
Education
Tourism
TAMALE CAN BECOME AN SEZ AND EXPAND ITS ROLE TO BECOME THE SERVICES AND MANUFACTURING HUB FOR THE NSEZ
Cluster Catalyst for Change – SEZ
40
IndustryLight manufacturing
Textiles, garments
Vehicle assembly
Agri-processing
Digital/IT HubAgricultural Svcs
Finance
Medical HubTeaching Hospital
Clinics, Private
Hospitals
Regional Education
Centre
University
Polytechnic
Vocational Schools
LogisticsStorage, warehousing
transportation
Tourism, Lifestyle
Artisanal Crafts
WHILE BUIPE CAN BECOME THE INDUSTRIAL NODE AND RIVER PORT HUB
Cluster Catalyst for Change - SEZ
41
IndustrySteel/iron goods
Plastics
Fertilizers
Cement
River Port HubBoat building, Marine
repairs
Ferry services
Warehousing
ConstructionTiles, Roofs,
Bricks, Mortar, marble
products
LogisticsOil storage
Distribution/Reefers
Transportation
Meat, poultry industryAbattoir
Meat packing
Cattle holding
Poultry production
Agri-processingMilling, flour production,
oils, etc
BOLGATANGA WILL HAVE A DISTRIPARK OR FTZ WHILE WA WILL HAVE AN INDUSTRIAL PARK, BOTH WITH A CLUSTER FOCUS
42
BOLGATANGA FTZ or
DISTRIPARK
1. Plastics, Rubber
2. Electrical goods
3. Food products
4. Textiles, Clothing
5. Footwear
6. Vegetables
7. Stone and glass
products
Focused on trade with B
Faso, Niger, Benin, Togo
WA
INDUSTRIAL PARK
1. Textiles, Clothing
2. Food products
3. Vegetables
4. Plastics, Rubber
5. Footwear
6. Stone and glass
products
7. Electrical goods
Potential for future trade
with Cote d’Ivoire
WHILE SEVERAL LIGHT MANUFACTURING SECTORS COULD BE CONSIDERED WITHIN THE VARIOUS CLUSTERS
43
Textile Sector
Textiles, Yarn,
Garments,
Leather Products
Footwear
Cordage, Rope
and Twine
Assembly
Refrigerators
Airconditioners
Bicycles
Motorcycles
Generator parts
Non-metallic
Glass
Ceramics
Chalks, crayons
Cement
Foam
Rubber products
Basic metal
Packaging
Enamel ware
Galvanised sheets
Nail and wire
Chemicals
Soaps
Detergents
Safety matches
Toiletries
Cosmetics
Resins
Food, Beverages
Starch
Flour milling
Fruit Juice
Animal feeds
Sugar
Edible oils
Poultry
THE TEXTILE CLUSTER, FOR EXAMPLE, CAN BE EXTENSIVE AND INTEGRATED WITH OTHER SECTORS
44
TEXTILE
PRODUCTION
FIBRES
&
YARNS
CHEMICALS
&
DYEING
TANNING
FASHION
&
GARMENTS
TEXTILE MACHINERY
NOTIONS
(BUTTONS, THREADS,
ZIPPERS)
WITH MINING AND TOURISM ADDING TO GROWTH IN THE AREA
◦ Upper East and Upper West should also expand mining to take advantage of the gold seams that
have been identified in both areas. Mining rights and land tenure may need to be reviewed to
support both domestic and foreign investors in these ventures. The ferrous metals discovered in the
eastern areas should also be extracted for downstream industries.
◦ Mining will attract other industries to the area to form clusters of economic activity – vehicle
repairs and servicing, banking and finance, retail and recreational services, parts supplies, and
transportation.
◦ Tourism potential throughout the SADA area needs to be promoted aggressively. The Mole Reserve,
Larabanga cultural area, the Paga sacred crocodile pools, and the unique cultures of the Upper
West and Volta areas need to be marketed with more publicity in international tourism fairs. But
this also calls for better facilities such as hotels and restaurants, and easier access to these areas.
45
III THE CHALLENGE OF TRANSFORMATION
GHANA’S INDUSTRIALIZATION STRATEGY OF VALUE-ADDED PROCESSING AND PRIVATE SECTOR PARTICIPATION HAS TO BECOME EFFECTIVE
◦ Expand productive employment in the manufacturing sector;
◦ Create a modern productive economy with high levels of value-addition;
◦ Expand technological capacity in the manufacturing sector;
◦ Promote agro-based industrial development;
◦ Promote spatial distribution of industries to reduce poverty and income inequality;
◦ Provide consumers with fairly priced, better quality products and services;
◦ Make firms in manufacturing competitive in domestic and international markets.
47
Source: Government of Ghana , 2011, ‘Industrial Sector Support Programme’, Accra: Ministry of Trade and Industry.
A NETWORK OF CENTRES CAN INTEGRATE THE THREE THRUSTS AND SUPPORT THE GOVERNMENT’S INDUSTRIAL STRATEGY
48
TAMALE
BOLGADistripark
WA
BUIPE
KETE
KRACHI
KINTAM
PO
SEZ
FOR BURKINA FASO, NIGER, BENIN
YENDI
FOR TOGO
The Tamale-Buipe area will be constituted as an SEZ, while Bolgatanga will have a distripark or FTZ
to support trade with the immediate neighbours
COTE d’IVOIRE
AN SEZ LINKED TO OTHER FTZs OR DISTRIPARKS CAN HAVE SIGNIFICANT SCALE EFFECTS FOR ECONOMIC TRANSFORMATION
◦ Takes advantage of location, trade preferences and labour to create large-scale
employment and diversify from reliance on natural resource sectors;
◦ Employ more women in the formal sector;
◦ Develop links between local SMEs and investors in the SEZ;
◦ Capitalise on the expanded market opportunities in regional markets, offshore
services, and regional investors;
◦ Improve value-added capabilities in resource-based sectors;
◦ Act as a catalyst for regional transformation through agglomeration effects with
superior infrastructure and connectivity to other centres;
◦ Obtain private sector interest and participation in SEZ formation, operations
and marketing.
49
Source: Farole, 2011, World Bank; various others.
AND CALLS FOR STRENGTHENING THE REGIONAL CENTRES
50
TAMALE (SEZ)NORTHERN
SERVICES HUB
BOLGATANGA
Agriculture
Mining
Abattoir
Plastics, Rubber
Electrical goods
Food products
Cultural Tourism
WA Shea nut
Groundnuts
Maize
Soybeans
Mining
Textiles, garments
Food products
Vegetables
Tourism, crafts
KINTAMPO
Cassava
Maize
Fruits
Soy beans
Cashews
BUIPE (SEZ)
INDUSTRIAL
NODELight manufacturing
Textiles, garments
Vehicle assembly
Agri-processing
Digital services, IT park
Finance, Insurance
Logistics, warehousing
Transportation
Regional Medical Hub
Regional Education Centre
Lifestyle/Hospitality/Tourism
Metal Industry
River port hub
Cement production
Oil storage
Fertilizer production
Cattle holding
Abattoir
Meat packing
Twinning KETE
KRACHI
Cassava
Yam
Aquaculture
Rice
Vegetables
Mining Belt
(Upper East,
Upper West)
BUT THERE HAS TO BE A MARKED IMPROVEMENT IN EFFICIENCY FOR SEZs TO BECOME CATALYSTS FOR CHANGE
51
Source: Adapted from Farole 2011, World Bank
WITH AN ALMOST SEAMLESS TRADE DOCUMENTATION AND CLEARANCE PROCESS
52
Source: Adapted from Farole 2011, World Bank
WHILE REDUCING BORDER RELATED (AND OTHER) IMPEDIMENTS FOR THE MOVEMENT OF GOODS
53
Border and Cross-country Impediments
•Truck drivers are forced to pay GhC 50 for a
trip, with around 10 checkpoints demanding
payment, from Tema to Paga on the border
with Burkina Faso, and are then forced to pay
more for the crossing (Modern Ghana, 3 Sept
2012);
•Similar issues are apparent in the border
crossings with Cote’d’Ivoire and Togo;
•These “unofficial” charges act as an indirect
tax on goods being traded across the borders
and reduces the incentives to trade;
•The NSEZ area straddles three borders –
Cote D’Ivoire, Burkina Faso and Togo - and
will bear the brunt of these impediments if
they are not resolved.
IV THE WAY FORWARD – IMPLEMENTATION
CHOOSESTRATEGY
REVIEWPOLICIES
ENGAGE
THE
PRIVATE
SECTOR
REFINE
POLICIES,
IMPLEMENT
THE
PLAN
THE IMPLEMENTATION STAGES
THE TRANSFORMATION OF NSEZ REQUIRES SUSTAINED POLICY IMPLEMENTATION
◦ An aggressive push for structural change with the participation of the private sector, the efficient improvement
in agricultural productivity, introduction of agri-processing, the creation of a light manufacturing capability to
support trade with neighbours, and the flowering of a service sector that capitalises on manufacturing and
agriculture can have scale effects to sustain a momentum for change.
◦ A less efficient approach will lead to a continuing dependence on agriculture with reduced latitude for
manufacturing or services to become an integrated feature of the transformation process.
◦ NSEZ’s transformation is expected to occur within the context of Ghana’s economic trajectory, but being
cognizant of the fact that transformation within NSEZ will have an impact on the dynamics of national
economic growth.
56
THE CHALLENGE IS, THEREFORE, TO IMPLEMENT EFFICIENTLY, MONITOR PERFORMANCE AND MAINTAIN THE MOMENTUM OF CHANGE
◦ Three (or more) possibilities need to be considered in earnest:
◦ An aggressive transformation plan; or
◦ A more moderate approach to structural change; or
◦ A slow and gradual reformation of NSEZ.
◦ All plans will require
◦ political commitment
◦ institutional clarity
◦ unity of purpose
◦ The aggressive transformation plan, if executed and implemented with confidence, can achieve
significant outcomes.
57
BUT THIS WILL REQUIRE EFFICIENT IMPLEMENTATION OF SEVERAL CONSISTENT POLICY MEASURES
58
• Improvement in education and skills
training
• Better market access (RoW and ECOWAS)
• Setting up an SEZ and FTZ (or Distripark)
• Reducing bureaucratic burdens
• Efficient information transfer
• Improving private sector participation
• Diversifying crops
• Better farm management techniques
• Reducing border trade impediments
• Resolving land tenure constraints
Selected Policy Considerations
EMBEDDED IN A NATIONAL INVESTMENT ATTRACTION PLAN
POLICY MEASURES
◦ A re-designed tax structure for investments;
◦ Consolidation of Bilateral Investment Treaties and Double Taxation
Agreements;
◦ A skills development policy (with private sector participation);
◦ Fast-track investment promotion approvals;
◦ Transparent CIQ facilities for investors;
◦ Foreign employment permits for specific skills.
59
IN PARALLEL WITH SEVERAL NEXT STEPS
IMMEDIATE NEXT STEPS
◦ Discussions with the private sector
◦ Requirements for business investment in the north
◦ Identification of appropriate sectors, clusters
◦ Commitments on investment and timing
◦ Internal review of current policies and measures
◦ Identify gaps with those from discussions with the private sector
◦ Obtain closure of policy adjustments and implementation requirements
◦ Design a detailed implementation plan with private sector participation
◦ Priority sector support programmes
◦ SEZ and distripark (or FTZ) design and implementation strategy
◦ Marketing plan for selling the SEZ and distripark facilities to investors
◦ Obtaining local community connectivity to investment promotion efforts
60
V THE ECONOMIC IMPACT OF TRANSFORMATION
GDP IN NSEZ COULD INCREASE TO BETWEEN 180 AND 325 GHc bn by 2040, DEPENDING ON THE EFFICIENCY OF IMPLEMENTATION
62
Source: Sreekumar Siddique analysis; Industry consists of Agri-processing and manufacturing;
Ghana growth rates of 9.3 %, 8.3% and 7.7 % respectively
WITH ACHIEVABLE SECTOR GROWTH
63
Source: Sreekumar Siddique analysis; Industry consists of Agri-processing and manufacturing;
Ghana growth rates of 9.3 %, 8.3% and 7.7 % respectively
NATIONAL GROWTH
2010- 2013
Agriculture 15.6 %
Industry 46.3 %
Services 26.6 %
AND TRANSFORMATIONAL CHANGE ACCELERATING BY 2030
64
Source: Sreekumar Siddique analysis
WHILE REDUCING DEPENDENCE ON AGRICULTURE BY 2040
65
Source: Sreekumar Siddique analysis
NSEZ GDP IS EXPECTED TO RISE TO 324 GHc bn by 2040 UNDER AN AGGRESSIVE GROWTH STRATEGY
66
Source: Sreekumar Siddique analysis
WITH STRUCTURAL TRANSFORMATION BECOMING EVIDENT WITHIN 10 YEARS
67Source: Sreekumar Siddique analysis
AND SUPPORTING THE GROWTH OF THE NATIONAL ECONOMY
68
Source: Sreekumar Siddique analysis
WHILE ACHIEVING SPATIAL BENEFITS WITHIN NSEZ
69
Source: Sreekumar Siddique analysis
GDP PER CAPITA IN NSEZ COULD, AS A RESULT, INCREASE TO AROUND GHc30,000 BY 2040
70
Source: Sreekumar Siddique analysis; Population growth in NSEZ at 2.5 percent
AND GHANA HAS THE FORTITUDE TO ACHIEVE DEVELOPMENT WITH SOCIAL COHESION
71
While the rest of the world has been improving technology, Ghana
has been improving the quality of man's humanity to man.
Maya Angelou
PART TWO
NOW FOR THE HARD WORK
KEY ISSUES
◦How should NSEZ transform its economic
structure?
◦What socio-economic factors will drive this
transformation?
◦What is the vision for this structural change?
◦What will be the strategy for implementation?
OPTIONS FOR CONSIDERATION
◦ Reduce dependence on agriculture
◦ Expand services
◦ Infuse appropriate manufacturing capabilities
◦ Seek aggressive implementation strategy
◦ Find ways to reduce inefficiency
◦ Engage the private sector
CHOOSING THE APPROPRIATE STRATEGY
Criteria
• Maintain growth potential
• Seek significant efficiency gains
• Obtain stakeholder acceptance
• Fit with national development goals
• Ensure equitable distribution of gains in growth
• Strengthen private-public interaction
SOME QUESTIONS TO PONDER
◦ What businesses are most likely to situate in NSEZ?
◦ What are the current products - agricultural and industrial ?
◦ What services do you use, and what do you need?
◦ Will women be encouraged to work in the new businesses?
◦ What do you use mobile phones for?
◦ How do you connect with the neighbouring countries?
◦ Which goods do you send across the border? and what do you receive in return?
◦ What is the nearest regional town in your area? What do you obtain from these
towns?
◦ Will you allow different skills (people from other parts of Ghana) to settle in NSEZ
when new businesses come?
◦ Are you willing to be re-trained (or trained) in new sectors?
HOPE YOU ARE NOT TIRED,
THE WORK HAS JUST BEGUN.
