Strong Productive Capacity, missing link in African Economies – Bawumia

Delivering a lecturer at the 3rd advancement lecture series at the university of Cape Coast on the theme: developing stronger economies for the African Continent: the missing link”, the Vice President says “strong economies are built on the back of strong, and steadily expanding productive capacity of nations on the back of sound economic governance”.

Dr. Bawumia added that “although Ghana for example graduated from Less Developed Economy status to Lower Middle Income Country (LMIC) status in 2007, the recent fall in world commodity prices (of oil, minerals, and cocoa) remind us how vulnerable our economy is to external shocks. We are faced with the risks of being trapped in this LMIC status if we don’t push our productive capacities beyond the mere extraction and exports of raw commodities”.

World Bank Study on successful Economies

According to the Vice President, “In 2006, the World Bank set up a Commission to study countries that have managed to build their economies since 1950. Headed by the Nobel Laureate Michael Spence, the Commission released its finding in 2008 and observed that

”In all cases of sustained, high growth, the (successful) economies have absorbed know-how, technology and more generally knowledge from the rest of the world. These economies did not have to originate much of this knowledge, but they did have to assimilate it at a tremendous pace. …Knowledge acquired from the global economy is thus the fundamental basis of economic catch-up and sustained growth.”

The Vice President’s Recommendation

Dr. Bawumia observed that “Developing stronger economies requires good governance and protecting the social and economic opportunities of citizens. It also requires a change in our attitude in the way we deal with our common wealth. Those who steal from the common wealth through embezzlement and corruption undermine our collective ability to build stronger economies because they distort incentives for work” the Vice President said.

If Ghana as a country want to develop, Dr. Bawumia recommended that, we ask and answer three simple questions in our attempt to building stronger economies. ” I am asking you to attempt all questions; Do we want to remain a resource-based economy, extracting and exporting our diminishing resource endowments?
Do we wish to depend on the generosity of others through aid? Or do we want to be a knowledge-intensive and innovation-based inclusive economy”?

The Vice President concluded that “the vision set out by President Nana Addo Dankwa Akufo- Addo has answered the questions” posed above. “We want a Ghana in which we add value to our raw materials. We want a Ghana beyond aid. We want to build a knowledge based economy. To do all of these, we must build our productive capacity as a nation: This is the missing link to building strong economies in Africa”.