Tony Oteng-Gyasi: IMF and World Bank are not to blame for Africa’s underdevelopment

Tony Oteng-Gyasi, a former president of the Association of Ghana Industries (AGI) and an industrialist, has stated that the World Bank and the International Monetary Fund (IMF) can lift Ghana and other African nations out of poverty and into an economic boom provided they closely follow and put into practice the policy recommendations of the Bretton Woods institutions.

Mr. Oteng-Gyasi referred to the economies of China and other so-called Asian Tigers as having first prospered under the watch of the two international financial institutions, saying that the common refrain in Ghana that “no country has developed under the watch of the IMF and World Bank” was “patently false.”

The corporate governance expert said that while other nations obediently followed and implemented the recommendations of these institutions, pride and indiscipline caused Ghana and other African countries to treat their advice half-heartedly, leading to limited economic growth. She was speaking yesterday in Accra at the University of Ghana’s 2023 Alumni Lecture.

These organizations have offered guidance and assisted countries in Asia in experiencing extraordinarily strong economic growth.

The Asian Tigers were generated by these institutions, according to the previous University of Ghana Council Chairman.

“We want to be Lions in Africa, but we’re ignoring the medicine the Asians took religiously.”

“The World Bank and IMF have given good and useful policy advice to our nation, from the free zones concept as part of the export promotion strategy, to the Gratis Technology centers as a foundation for industrial development, and regular tax policy advice,” he said at the event, which was attended by current and former students, academics, and members of the business community.

Past presenters

At the renowned speaker series established by the University of Ghana Alumni Association (UGAA) in 1974 for thought-provoking lectures on matters of national relevance, Mr. Oteng-Gyasi became the 34th speaker and the second individual from the private sector.

The topic of this year’s celebration, which fell on the university’s 75th anniversary, was “The Fault, Dear Brutus.”

Prof. Nana Abba Appiah Amfo, the vice chancellor of the institution, presided over it.

Among the topics covered in Mr. Oteng-Gyasi’s thought-provoking talk were natural resource endowment and its exploitation, public sector procurement and rent-seeking, and economic development and policy formulations.

Manufacturing is struggling.

The well-known businessman also attributed Ghana’s dismal manufacturing performance throughout time to the absence of value chains, a practical manufacturing promotion strategy, and simpler ways to profit from imports.

The head of the Ghana Revenue Authority’s board of directors recalled that many of the country’s most talented individuals preferred to focus their efforts on securing lucrative public contracts for imported goods and services rather than the labor-intensive process of establishing and expanding manufacturing industries, while the International Finance Corporation struggled to find sufficient bankable manufacturing projects to support in Ghana.

He claimed that because national policies at the microsector level did not encourage imports, the incentive system was biased in favor of imports.

Rather, all policies work against local production efforts, from the many import tariff exemptions that are legislated to the insistence on currency rate stability in the face of local inflation.

Even local content regulations are subject to legal exceptions.

The exception quickly turns into the rule, he claimed.

Trader nation
Additionally, Mr. Oteng-Gyasi said that importers and merchants had a distinct advantage over local manufacturers due to the nation’s dismal track record of upholding regulations pertaining to local content requirements and import duty regimes.

He claimed that this had led to the loss of high-quality, career-building manufacturing employment that supported and expanded middle-class families, creating a country of merchants.

We are quickly moving from a society where a small, affluent minority enjoys economic rent, state procurement, and trading monopolies to one where the vast majority of people are unemployed or underemployed and are locked in low-skill, pointless occupations in the trading and service industries.

“In the process, the path to gaining and holding onto political power becomes the politics of appeasement of this majority, with low prices and free social programs because of their voting power,” the speaker stated.

Galamsey

Speaking about illicit mining, also known as galamsey, Mr. Oteng-Gyasi stated that the threat showed that the nation had not learned from the harm that illegal logging had caused to the landscape.

He claimed that the galamsey plague uncannily brought to mind the nation’s impending consequences and the failed battle against illicit logging.

“I recall that the government at the time was fighting illicit logging to the point where chainsaw sales and distribution were closely watched and managed. Tony

However, someone managed to get around official regulations by sneaking chainsaws across our borders.

“We were like a people determined to destroy our timber resources for a pittance, even in the face of the best efforts of our government.”

Choice timber species including the renowned mahogany, afromosia, odum, and asanfona were consequently exploited to extinction, he claimed. Tony

“They bought our timber logs with Mercedes Benz cars that have long since broken down.

We are facing enormous reforestation bills in the interim.

Mr. Oteng-Gyasi said, “This example of our timber industry is an indication of where our illegal mining recklessness could lead our nation to.”

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