What The Papers Say
People's Daily Graphic, Ghana, Nov. 8, 1985
Ghana and Co. Ltd
Many Ghanaians have still not realised that the nation is a family company, Ghana and Co. Ltd., in which we the people are both shareholders and workers, and that its losses are our own losses and its profits our own profits.But we must recognise that running a nation is like running a farm, a shop or a shoe repairing enterprise. It is business. And a successful business is that which makes profit.
Whilst the farmer, the shopkeeper and the shoe-repairer examine their operating costs and try to increase efficiency and productivity in order to survive and make profit, many Ghanaians never pause to consider whether the nation is being profitable or not.
We often assume that the state has a duty to provide services without any profit motive, and without even covering costs. Where the resources to do this are to come from remains a mystery. Since we have no basis for calculating the profitability of social services except in terms of the supply of those services to the people, we are unable to see whether greater benefits could be provided to more people at less cost through a different arrangement.
But we should also be able to calculate the benefits of social amenities in terms of MONEY as well as the good intentions behind them.
In other words, we should be conscious of the COST- EFFECTIVENESS of every aspect of the operation of Ghana and Co. Ltd.
Profitability depends on efficient use of resources.
Thus, for instance, even though a government may decide that the cost of providing good drinking water cannot be fully borne directly by consumers, it goes against the total welfare of the people if the supply of water is done inefficiently. The inefficiency has to be paid for by the people in one way or another, most probably by being deprived of some other most urgent benefit would be the immediate injection of a large Important amenity because there are no funds available.
The case for the state running its businesses along purely commercial lines becomes a matter of pressing urgency. What is but whether the profits when reinvested elsewhere are of more important is not whether the state has the duty to make profit, benefit to the people and exceed the benefits to be gained from a non-profit public agency.
There are those who believe that private individuals make better businessmen than the state, and this also needs attention. Where this is so, it is usually due to the inability of state employees to see their efforts in the national context. A private businessman can comprehend all the factors affecting his business and their effects on his pocket, and this makes him strive for efficiency. But it is more difficult to see the inter- related complexities of a whole national economy.
A well-known management consultant has stated that, "it is often much cheaper for a society to allow an enterprise to earn a profit than it is to create a public enterprise to perform the same function without a profit."
He cites an example of refuse collection in two nearby municipalities. One collects refuse as a non-profit social service at a cost of $209 per household per year, and covers the cost through taxes. A short distance away, in the other town, refuse is collected from similar houses at a cost of $77 per year, by a private company which makes a profit.
Therefore, in this example, the private firm is more useful to the people served than the public enterprise that costs them several times as much through taxes
Obviously, this example taken at its face value can be simplistic and misleading. There are, for instance reasons why certain strategic services should not be under private control...
National Concord, Nigeria, November 6
Wooing foreign investors
It has long been recognised that part of the problem confronting our ailing national economy has been the gross insufficiency of investment capital to be effectively utilised both for long-term development purposes and for short-term productive ventures.This alarming shortfall in funds has led to the current stand- still in virtually all economic activities in the country, with such socially dislocating repercussions as rampant inflation, a high unemployment rate and a terrifyingly low level of industrial activity.
It then becomes obvious that, as the nation cannot muster the needed funds locally, an eventual recourse to foreign capital will prove too attractive to be long ignored.
It must have been in recognition of these facts that the present administration decided to give priority to the articulation and actualisation of a lasting and efficient package of incentives aimed at encouraging willing and capable foreign investors.
In a recently published interview with Time Magazine, President Babangida stated that Nigeria would soon launch an intensive campaign to attract potential investors from abroad. Similarly, the Minister of Special Duties, Air Vice-Marshall Ishaya Shekari, recently stated in New York that one of the major priorities of this administration was the removal of all those obstacles which had impeded foreign investment. He also mentioned government's resolve to restore international confidence in the economy. The administration's determination in this regard is therefore clear.
The benefits to the economy that an increase in outside investment should yield are rather obvious. Without doubt, the dose of capital into a society sorely starved of funds.
Foreign capital, if properly utilised, could also bring in its wake the advanced technology that would greatly accelerate the pace of our industrial development, with remarkably beneficial spill-over effects to other sectors of the economy. There is also the possibility that foreign competition would
serve to pull our own industrial and manufacturing houses out of their present state of lethargy and propel them towards greater heights of competitiveness. What is left is for government to deliberately pursue policies which will provide a conducive atmosphere to which this foreign capital would be drawn and in which it could profitably operate to the mutual benefit of both the investors and our economic development.
The indication given by Air Vice-Marshall Shekari that the government plans to establish a central agency to facilitate the operation of foreign companies promises to finally streamline the frustrating log-jam of bureaucracy with which potential investors now have to grapple. It is also time for the government to consider allowing individual states the freedom to design different packages of incentives and tax holidays with which they could attract and indeed compete for investors.
In carrying out these and other procedures, the onus still lies with government to consistently ensure that the legitimate interests of the national economy are not sacrificed on the altar of foreign investment. Capital must be made to flow into those areas of greatest need, such as agriculture and not brewing, and its operation must not unduly hinder the sustained development of Nigerian entrepreneurship.
