Ghana patterns 1D1F Industrial Policy after Nigeria’s OLOP

Business News
  • UBA, Other Banks Lend Hands

 By Franklin Ocheneyi

The government of Ghana under the leadership of President Akufo-Addo is replicating one of Nigeria’s industrial policies, especially “One Local Government One Product (OLOP),” to industrialize his country.

It would be recalled that Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) developed the OLOP programme in April 2009 to revitalize the rural economy by developing at least, one certain product in one particular local government, throughout the 774 local government areas in the country.

This is to improve employment opportunities and alleviate poverty in rural areas. The programme was based on the One-Village-One-Product (OVOP) movement implemented in the Oita Prefecture in Japan.

The governments of both Nigeria and Japan agreed to implement a technical cooperation programme to verify implementation methods and institutional arrangements for the promotion of OLOP.

Pilot projects were conducted in Kano, Niger, Osun, Anambra, Kaduna and Katsina States including Abuja, the Federal Capital Territory (FCT) and in each of these ones, SMEDAN selected a product.

These products are Rice, Groundnut Oil and Leather Products for Kano State and Yam, Groundnut Oil and Shea nut for Niger State.

Based on the lessons learnt from the pilot projects, SMEDAN is now set to implement the programme in all States of the Federation and Local Government Areas, anchoring on the National Enterprise Development Programme (NEDEP).

“What the government has decided is that it will absorb 50 percent of the interest rates of these 1D1F companies so that determining what is bankable will be done by the professionals.

Ghana , two months ago, launched its own version of OLOP, called “ONE DISTRICT, ONE FACTORY (1D1F) Programme”

Senior Minister, Yaw Osafo Maafo, said 1D1F which seeks to take the bull by the horn in ensuring that industrial renaissance should be decentralized into the communities through effective public-private sector partnership.

Maafo was in Nigeria last week to address the 46th annual general meeting of Manufacturers Association of Nigeria, in Lagos.

He said that the government of Ghana is committed to initiating industrial policies and mainstream them in his governance systems from the local level right up to the centre.

“We believe that we have eluded ourselves far too long as a country and a continent with basic policy industrial development packages to drive job creation and wealth maximization.

According to him, 1DIF, which is private sector driven is the new game changer in our industrial development. This way, we will reverse the rural-urban drift and migration of our able and energetic skilled labour to foreign countries with their attendant problems.

 Funds for Implementation

As a result, the government of Ghana as a way of implementing its industrialization agenda has set aside some funds to assist struggling but viable industries to enable them overcome their short-term challenges.

“In addition, government has also been able to convince some of the local banks to set aside over Two Billion ($2 billion dollars) dollars to assist in the establishment of the 1D1F Policy. Government is only playing an effective facilitating role to ensure successful implementation of the programme.

He gave details on the progress of the programme and said: “So far 15 projects have been approved for implementation under the 1D1F. We expect that by end of this year, 50 of those which have been apprised will be in production.”

The Akufo-Addo-led administration is seeking to transform the economic fortunes of the country by undertaking a massive industrialisation campaign which will equip and empower communities to utilise their local resources in manufacturing products that are in high demand both locally and internationally.

The initiative, otherwise known as district enterprises, is to establish medium-to-large-scale factories or industrial enterprises that have the potential to fundamentally affect the economy of the districts.

Among other things, the district enterprise is aimed at supporting existing companies, while creating new ones to create employment, as well as add value to the country’s natural resource base.

Already, the government has released GHS465 million for the commencement of the one-district-one-factory project.

Another GHS256 million for the revamping of 100 private commercially viable and distressed companies throughout the country was also approved by the government.

UBA, Other Banks Lend Hands

The Senior Minister disclosed that GCB Bank has agreed to make available GHS1 billion while UBA will support with GHS 880 million. The others are adb, GHS200 million; EXON Bank, GHS103 million; UMB, GHS440 million and SocieteGenerale Ghana have agreed to support with GHS25 million.

“We continue to count and other banks are discussing with us,” Maafo added.

“The projects will have to be appraised by the banks because the 1D1F is all in the domain of the private sector, not the government.

“What the government has decided is that it will absorb 50 percent of the interest rates of these 1D1F companies so that determining what is bankable will be done by the professionals. When you have been appraised, shortlisted and you have qualified, the cost of money to you will be shared between the government and yourself,” he disclosed.

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