As has already been mentioned by previous speakers, the organisers have chosen to maintain the same theme – A Ghanaian owned economy – for this event for the 5year period. I support this as it makes it easy for referencing and also helps us monitor our progress.
My definition of a Ghanaian Owned Economy remains that economy where at least 40% of GDP is derived from the economic activities of businesses of Ghanaian ownership…not origin. OWNERSHIP.
It’s not too ambitious an aim to have cos really that seems to be the case with most of the countries that a small mind like mine would consider as showing signs of prosperity. I can speak of Cote d’voire, Nigeria, Egypt until recently, South Africa AND advanced nations like Japan and others.
In sync with the organisers I’ve thus chosen to do a sequel to the presentation I made in 2015. Last year I touched on the evolution of entrepreneurship in Ghana, why I believe in GH and I also shared some personal thoughts about PPP. Today I intend to advance my presentation on entrepreneurship but from a totally different perspective, I’d certainly gossip about the government, Again I’d share why I still have faith in GH and finally I’d share with you something personal.
It’s normal to expect most of the SMEs in any country to be owned and run by natives but there’s also an emerging trend where natives are beginning to own respectable shares in MNCs operating in their respective countries. This is because MNCs are very crucial in any society and as a matter of fact most SMEs revolve around them and would not survive if these companies or corporations cease to exist.
To gather sufficient basis to support my claim I looked up some statistics available for Toyota & General Motors – of Japan and the US respectively. Let’s do some small mathematics here..
Toyota employs about 350,000 people worldwide, about 72,000 of whom live in Japan. The company also has a total of over 5,000 direct suppliers. It’s estimated that Toyota’s indirect suppliers exceed 50,000. This group of persons – their direct staff, direct and indirect suppliers also have their own network of distributors and suppliers who they deal with at several levels. They all buy food, drinks, go to church, buy clothes, patronize hotels, buy cars, fuel and the list goes on. When you work the math, about 20million people representing almost 16% of the population of Japan have their livelihood connected to the existence of Toyota. I gathered similar statistics also for General Motors.
Now, the sheer numbers of lives that are impacted by these companies alone have turned them into micro–economies within their country’s larger economy. And because some of their suppliers are from outside their mother countries, the stakes are so high that it’s in the interest of their local government as well as external governments to keep these institutions running.
There would be complete chaos if they fail and trust me GENERAL MOTORS or Toyota would never die.
I’ve come to realise that as societies evolve, these monster corporations are created in order to move wealth around within the system as well as to preserve the wealth for a long time within the system. If Toyota collapses, it means a certain farmer at Kiyamishito, a remote village in Japan loses income cos the company that provides canteen services for that company that supplies just seat-belts to Toyota would have run out of business.
The impact of these MNCs are too enormous to comprehend
Now let’s ask ourselves, would all of these people make more money than the MNC itself. C’mon. Certainly NO. And for me that’s where it begins to hurt when I notice that the MNC in question is not from that country. Yes you would pay tax…BUT how much aaahhhh! Only 25% of profits you choose to DECLARE…-I’M SURE YOU KNOW WHAT I MEAN…And what happens to that 75% remaining..It’s for the shareholders.
If shareholders are not locals, the funds would be repatriated and safely so cos it won’t make sense for risk management purposes to keep the funds here. Besides, it’s their money anyway. That’s the reality of the case.
So can you imagine if MTN was owned hypothetically by a mass of Ghanaian shareholders…. What would they do with their profits? That money would just be going round and round in GH.
Isn’t it a shame that 60years down independence we cannot count even 10 MNCs from Ghana. And by this I’m not talking companies owned by individuals who may have some skeletal branches outside GH, I mean companies listed on the stock exchange, employing massive numbers and who have been able to extend their dominion across our borders. That’s what I’m talking about.
C. WHY WE CANT HAVE MNCs IN GHANA
You may disagree but I believe that at this rate it would take almost forever for us to build MNCs of our own. You know why… cos the folks who can make it happen – either knowingly or unknowingly are waiting for it to happen by natural occurrence.
As they always would say….Yerr and so the private sector is the engine of growth and as for us we just create the enabling environment for private sector to thrive. Yerr..our work is done. So the businessmen must move. No Sir! You are wrong.
By creating the environment, small companies like mine would thrive and find our level. We would be able to provide livelihood and economic opportunities to a few thousands of individuals but that’s where it ends…and I’d explain this soon.
You don’t have to expect BEIGE Capital to organically grow into becoming Ecobank, just like that. It doesn’t happen. A company like Ecobank was created into being by forces of greater influence. Same can be said for others like Dangote, GLO, UBA and the like.
And for that to happen there has to be a willingness on the part of the force that has influence over the system and can make things happen – in this case, the government – and also a willingness on the part of owners of the vessel that has potential to be exploded…
Author: Mike Nyinaku || Chief Executive Officer, The Beige Group