A financial and Economic journalist, Kwabena Adu Koranteng, has called on African countries to reduce their excessive dependency on raw material exports and imported consumer goods, as the only viable way to reduce poverty and social inequality on the continent.
He also called on The African Union to develop conventions to restrict all the African countries from exporting resources in their natural state or form.
‘’ The conversion must ensure that the natural resource, be it hydrocarbon ,or metallic elements like Gold Diamond , bauxite manganese, lithium , fish , water, among others must be polished , refined and value added to them to make them valuable before they are exported ‘’
‘’Multinational Institutions operating in resource production in Africa must also be made to establish manufacturing plants attached to their operations to process, refine and add value to their raw resources before shipping or exporting them. This is the only way we can create and sustain employment among the people on the continent.
This initiative will create jobs for the masses, generate revenue that will be kept in Africa and not be transferred by multinational firms through capital flights. No country or continent can develop to a first class level when its resources are shipped cheaply in raw or natural form to develop other countries and continents.’’
In a statement, He said Africa’s excessive dependency on its raw materials (ores, oil and agricultural products) is the cause of its retrogressive stated.
This situation, which he described as “chronic dependency”, is a result of the economic model left behind by the occupying colonial powers – a model designed to make Africa a reliable source of raw materials for their industrial economies. “This dependency has long been an observed phenomenon, but we have never managed to reverse the trend,” he added.
By way of a practical solution to this problem, he thus called on all profit-based economies in Africa to implement courageous policies and to move towards a model under which raw materials are processed locally.
This, in turn, will generate more wealth and employment, and will increase investment in the infrastructure sector – a key driver of growth. He concluded by arguing that the establishment of local processing industries will help to combat unemployment and vulnerability, as well as poverty more generally.
Ghana has a vast quantity of minerals within its borders ranging from gold to diamonds which are essential natural resources. government estimates that on average, the mining industry contributed only 5% of the nation’s GDP. Minerals in Ghana are mainly extracted for the export market with the government estimating that minerals made up roughly 40% of the country’s total exports.
An essential mineral in Ghana is gold which is primarily obtained through underground and alluvial mining. According to government, gold made up close to 90% of the minerals exported from the country every year.
Ghana’s gold deposits have attracted companies from Canada such as the Red Back Mining Company, and companies from South Africa such as the Anglo Gold Ashanti Company. For most of the early 1990s, approximately 20% of the gold mined in Ghana was extracted from underground mines particularly in the Ashanti region.
Ghana also has significant deposits of diamonds which plays a significant role in the country’s economy. Alluvial mining is the primary method through which diamonds are extracted in Ghana.
In 2009, Ghana produced 370,000 carats of rough diamonds, and although these are minimal compared to the world top producers, it plays a significant role in the country’s economy.
In 2014, the country was ranked among the top rough diamond producers. A 2014 report indicated that the most significant challenge facing the Ghanaian diamond sector was the smuggling of the precious stones into neighboring nations such as the Ivory Coast.
Historical evidence suggests that several organizations were searching for oil in Ghana during the 19th century. Despite the long history of oil exploration in the country, the first commercially viable field was discovered in 2008. Ghana is believed to have between 5 billion and 7 billion barrels of oil reserves, which makes the country as Africa’s 6th largest and the world’s 25th largest with proven oil reserves. Interestingly, all the crude oil produced in Ghana are exported out of the country to be refined and in return the state allows private business people to import refined petroleum products.
Challenges Facing the Ghanaian Economy
The Ghanaian economy faces numerous challenges such as the poorly developed infrastructure as well as the high poverty rates in most of the country.
The government of Ghana has partnered with international financial institutions to tackle the challenges affecting its economy.
According to the World Bank report, Ghana’s agricultural sector has a huge potential to be one of the leading sectors in the economy and could easily be transformed into an engine of job creation and economic growth.
According to the report, agriculture has a significantly larger multiplier effect particularly on employment, with the possibility of creating more than 750 jobs for every additional $1 million of output.