The Chief Operating Officer and Global Strategist for Goldman Sachs, Lisa Opoku has blamed the high informal system of most African economies for the relative low investments by large multinational corporations on the continent.
She says the situation also makes it expensive for businesses to sustain investment channeled into economies and turnaround the fortunes of emerging economies such as Ghana.
“It is very difficult for investors because you need to identify people, track record, for instance in the banking industry, it is difficult to track debtors; non-existing restricting laws and the absence of formal bankruptcy process which in other countries are very secure like,” she stated.
Despite efforts to increase financial inclusion, Ghana’s banking population still lags behind at an estimated 36 percent.
This is also coupled with challenges with the lack of coordination in information on the informal sector.
Lisa Opoku believes addressing these challenges will attract huge investments from corporations into the country and continent at large.
She made the remarks at the 18th MTN Business World Executive Breakfast meeting in Accra on the theme, “Attracting Investments to Ghana, lessons from Asia.”
“…When you buy a piece of land you that you are assured of and you do not have any issues with litigation. These things among others make it much more difficult and so I think if we do not move a little in terms of everyone being very focused on a clear goal of financial inclusion, it will be very difficult,” Lisa Opoku added.
Africa has high cost of investment
Meanwhile the strategist is of the view that investors to Africa or Ghana are equally faced with the challenge of meeting extra costs associated with recruiting to meet operational strategies.
According to her, while it costs firms relatively cheaper to hire personnel with requisite experience and skills in the developed economies, firms will have to cough up extra resources in order to attract similar resources in Africa for their organizations.
“You cannot find someone who is an expert in that just one piece that you need in Africa like you can in a developed country…the reason opportunities here [Africa] are higher yields is that they are more challenging. Although that’s a great opportunity for investors, it is a more difficult path,” Lisa Opoku stressed.
Experiences from Singapore
Though Ghana and Asian countries like Singapore and South Korea had in one point in history possessed similar economic and political conditions, the ‘Asian Tigers’ seem to have taken a leap that Ghana and her compatriots within the sub-region are finding difficulty to catch up.
But in Lisa Opoku’s view, the gap could be bridged when particular attention is taken to align leadership and culture to national policy.
She remarked, “This is the leadership and the policies…there are also parts of the culture in Singapore that you are required to go to the local schools, where there are some indoctrination in terms of national pride, making people proud of their heritage, and with a very strong focus on Mathematics and Science.”
“So this is a controlled society which will have seventy to eighty percent of the people turning up in a particular way.”
Lisa Opoku is however confident a change in policy with much emphasis and focus on the needed human resource will turn around the fortunes of Ghana’s economic outlook.
“We have more freedom here but the freedom comes with a cost; the outcome of every single individual is not going to be clearly defined as the outcome that one will get in Singapore under their system. So we sacrifice a bit in terms of freedom. But I think we can replicate their ideals of what the mission of our youth to focus on when they graduate,”
She concluded, “Considering the practice of national service in Ghana, we may need to ask; what are the areas that we really need more skills and really focus on, we need to focus on that and then from a policy level, we can achieve the same level of discipline that Singapore has.”
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana