Prof Justin Yifu Lin, a former Chief Economist and Senior Vice President of the World Bank, met with H. E. Dr Mahamudu Bawumia, Vice President of the Republic of Ghana, at the Presidency on Thursday, November 9, 2017.
Prof Lin who was in Ghana at the invitation of The Institute of Economic Affairs (IEA) to give a public lecture, “How to Achieve a Dynamic, Inclusive and Industrialised Economy in Ghana: A New Structural Economics Approach”, was accompanied to the Vice President’s Office by Mrs Jean Mensa, Executive Director, Dr Frankie Asare-Donkoh, Director of Advocacy and Programmes and Prof John Asafu-Adjaye, Senior Research Fellow, all of the IEA.
The discussions between the Vice President and Prof Lin centred around the issue of scaling up industrialisation to promote employment and reduce poverty in Ghana.
He noted that the domestic market or even the regional market (Sub-Sahara Africa) was relatively small in relation to the global demand.
Prof Lin also explained that in order to gain faster access to global markets, foreign direct investment should be sought from foreign firms already operating on the global market, adding that there was also the need for a well-targeted investment promotion, preferably championed by a high level government official such as the President or Vice President.
He gave the example of a shoe factory in Ethiopia that has successfully collaborated with Chinese investors and is now exporting to overseas markets. This project, he said, involved investment promotion in China led personally by then Prime Minister, Meles Zenawi.
Prof Lin made a number of key recommendations to ensure successful industrialisation including the establishment of industrial parks or enclaves, but added that successful industrial parks need good infrastructure (electricity, water supply, roads and ports to reduce firms’ transactions cost and make them competitive.
He said production in the industrial parks should target the global market in order to generate more jobs.
According to Prof Lin industrial parks should be publicly funded, but not necessarily operated by the government, explaining that it was not a good practice for the private sector to fund the creation of such parks because private owners are likely to be interested in maximising their rent, which would increase the operating costs of firms in the park.
Furthermore, private operators could have other incentives or goals not related to the parks, such as grabbing land for other purposes like real estate development, he noted.
The Vice President was appreciative of the visit and expressed the hope that it would be possible for Prof Lin to return to Ghana at a later time to meet with him and some cabinet ministers.