Accra (Greater Accra), 28th June 99 -

Africa's ownership of vast human and mineral resources is meaningless, unless investment is made in equipment, machines,

management and technology for their extraction, processing and export for the mutual benefit of the continent and investors.

President Jerry Rawlings, writing in a document titled: "Divestiture - Unlocking Ghana's Potential", said in today's world economy, where classical comparative advantage is replaced by technology and knowledge-based competitive advantage, Africa's ownership of resources could be useless if not well harnessed.

The 27 page-document issued by the Divestiture Implementation Committee (DIC) was prepared as an insight into Ghana's privatisation programme. It lists the successes of 14 divested companies, monies accrued from divestiture programmes, outstanding bills due the government and the modes and procedures in the divestiture programme.

"Africa's ownership of 95 per cent of the world's chromium, 75 per cent of platinum, 69 per cent of cobalt, 54 per cent of gold and 39 per cent of diamonds, as well as other resources such as petroleum copper, iron ore, bauxite, manganese and emeralds is meaningless, unless investment is made in equipment and machines ... for the mutual benefit of the peoples of our continent and investors".

President Rawlings noted that the process of globalisation and liberalisation, which characterises the world economy, offers great opportunities for economic growth and social development in Africa.

However, they also carry the risk of marginalisation and isolation for Africa, the least developed continent which also lacks sufficient commercial infrastructure.

"Consequently, Africa runs the risk of becoming even more seriously marginalised", President Rawlings said.

He said Africa's investment climate and potential for economic growth have improved remarkably, and the long dormant private sector is now on the move with trickling private capital flows.

He noted that Ghana is committed to operating and maintaining open and liberal market economy supported by a world-wide rules-based trading system.

"We are amending customs laws to make them consistent with the General Agreement on Trade and Tariffs (GATT) agreement on customs valuation".

The President mentioned the "three-dimensional free zone programme" and the Gateway strategy as incentives for promoting export processing and manufacturing and a proactive trade and investment regime.

Mr Kwame Peprah, Minister of Finance, said the development of the private sector as the engine of growth is making steady progress.

"The transfer of 212 enterprises and units to the private sector under the divestiture programme is indeed an effort at building the sector, which was generally non-existent due to the previous policies of state intervention in almost all industrial and commercial activities".

He said the government will sustain its programme of creating an enabling environment for the private sector to really develop into the engine of growth of the economy.

Mr Peprah, who is chairman of the DIC, said the committee is aware of the need to promote indigenous participation in the divestiture programme.

He said local involvement is mainly limited by difficulties local investors face in the assembling and pooling of resources for the purchase and rehabilitation of divested enterprises.

Mr Peprah said to address these concerns, the government has introduced a project to establish the Privatisation Trust, which will warehouse for a limited period government's minority shares in enterprises being privatised

"The Trust is to manage these shares through a management company and will be charged with packaging these shares for sale at a later date to employees of the enterprise, institutional investors and the public".

He stressed that government intends to pursue the divestiture programme vigorously in order to achieve an efficient and effective SOE regime, so that economic development as envisaged under Vision 2020 becomes a reality.

Mr Emmanuel Agbodo, Executive Secretary of DIC writing in the document under the title: 'Impact of Divestiture", said since the commencement of the divestiture programme, three studies have been conducted to assess its impact.

He said one finding is that the divestiture has resulted in increased sales as a result of improved productivity arising from the injection of new investment and improved management practices.

The studies also showed that an important outcome of the increase is capacity utilisation and general improvement in employment.

"It is observed that employment went up by 59 per cent in the surveyed enterprises".

"Widespread funding of state-owned enterprises, through renewal of their plant and equipment by government and the guarantee of loans and other facilities, has ceased in respect of divested SOE's.

"The process has brought a non-financial benefit to government through the relief of the burden of administering and supervising SOE's which are no more required in respect of divested companies".

It is also a finding of the studies that the Ghana Stock Exchange, through which some of the enterprises are divested, has boosted business as it has created awareness in the Ghanaian public and encouraged participation in the capital market.

"Entrepreneurship development, technology transfer and strong headways by the divested entities are the other findings that emerged from the study, Mr Agbodo added."

GRi?/