Digitalisation is reducing unemployment in Ghana – Boako tells NDC

Dr Gideon Boako, the spokesperson to the vice-president, has said digitisation is playing a critical role in the government’s quest to reduce the rate of unemployment in the country, despite a contrary claim by the opposition.

The Communications director of the opposition National Democratic Congress (NDC), Sammy Gyamfi, has said that Ghana’s challenges do not lie in digitisation.

“Of what use is ‘E-this and E-that’ to the ordinary Ghanaian who is jobless and cannot even afford to buy mobile data to access these digital platforms?” he asked.

“Digitalisation is good. It helps people to do things effectively with ease. The NDC/Mahama administration has a superior record in that regard. But digitalisation is useless unless it is linked to the economic empowerment of the people,” Gyamfi added.

Reacting to the comments at a news conference on Friday (5 November), Dr Boako said digitisation is rather making life easy for Ghanaians by creating more jobs.

“There is also the contention on how digitisation can help create jobs or reduce the rate of unemployment. Someone even said ‘y33p3 adwuma a wose digitization’ to wit, ‘we need jobs and you are talking about digitization’. But I dare say that digitisation is making it possible for many jobs to be created in both the private and public sectors,” Dr Boako said.

“Think of that young university student or graduate who does not have the required start-up capital to rent physical space or shop to ply her trade. She is able to skip this hurdle and trade using the social media platforms like Instagram, facebook and so on. Her shop is her dormitory or hostel, car booth or bedroom. She is able to advertise her products, get orders and receive payments through the mobile money interoperability with no hustle.

“She has a job now and hires a delivery man to deliver the goods to the buyer, thereby creating job for the delivery man also. The volumes of trade taking place via this technologically driven medium and the number of people employed in this space could be mind-blowing. There are many people today, who have turned their home kitchens into restaurants, yet no one visits them physically to eat. They advertise using digital technology, receive orders using digital technology, receive payments suing digital technology and move their incomes to bank accounts using digital technology. This is how digitization is creating jobs,” Dr Boako stated.

Below is the full statement

Good afternoon. It is an honour for me to join you all here today for such an important conversation. This interactive session with you will center on Ghana’s digitization agenda and how it fits well into President Akufo-Addo’s vision of building a modern Ghanaian economy anchored on digital technology. It is a conversation and political resolution that we must have as a country if indeed we want to be equally competitive in the global space.

Thankfully, the current political leadership led by President Nana Addo Dankwa Akufo-Addo is showing the needed interest and commitment to create a modern Ghanaian economy that can compete favourably globally and conform to the dictates of the fourth industrial revolution.

Undoubtedly, the global development paradigm is moving, some may argue has moved, from the industrial age into the technology and information age. This transition is coming with its own transition terms – such as E- commerce, E-procurement, E-marketing, E -business and electronic money. Not to be left behind is E-governance in the public sector, which is our focus this afternoon, and with it comes all the others earlier mentioned.

In nearly five years, this government has been pursuing aggressive digitization and digitalization agenda by using ICT as a tool to achieve better governance. The overarching objective is to get government public institutions to use ICT to enhance their ways and means of linking with the general public in ways to reduce costs, improve performance, increase ease of access and speed of delivery and effectiveness. It is about how government organizes itself—its administration, rules and regulations and frameworks to coordinate and perform public administration.

Overcoming Bureaucratic hurdles through Digitization

For many post-colonial societies like ours that appear stacked in the old antiquated ways of doing things, technological innovations and digitization are just what is needed to leapfrog years of public administration reforms that have almost become a never-ending business, in some cases even more bureaucratic, more red-tape, more opaque and impediments to doing business.

Much of the public sector administration which this government inherited were actually set up as instruments of governance of the people by the ruling class. It is a rigid public sector, unbending, centralized and in many ways slow in responding to public needs. And, I must say majority of the public administration systems even as at today are pretty much the same, despite the interventions we are seeing. They all have to be fixed and now.

Following the brilliant Public Lecture delivered by the Vice President, Dr. Mahamudu Bawumia on digital economy at Ashesi university some four days ago Ghanaians have had some reawakening on the potentials of digitalization and digitization for economic development.

Embracing digital technologies means providing strategic drivers to create open participatory and trustworthy public sectors, to improve social inclusiveness and government accountability, and to bring together government and non-government actors to develop innovative approaches to national development and long-term sustainable growth.

A World Bank study has shown that every 10% increase in broadband penetration boosts GDP by an average of 1.3% and every 10% increase in mobile teledensity results in a 0.7% increase in the Gross Domestic Product (GDP) of a nation. This means Digital Governance, which will need these tools to be successful, is crucial to economic transformation of developing nations like Ghana.

How is Ghana’s digitisation agenda improving the economy? Many pundits and analysts have tried to either explain or seek clarity on how Ghana’s digitization agenda is linked to economic management or economic development? While the theoretical explanations for the digitization and economic growth nexus is clear and established, the consequential practicalities of this linkage appear unclear to some. I will attempt to highlight a few of this.

Digitization, exchange rate depreciation, debt levels, cost of goods and services

In trying to appreciate how the deployment of digital technologies can help reduce the cost of goods and services we need to understand how price build ups of goods occur through exchange rate exposures. It must be understood that one means by which the currencies of countries become exposed is rising debt levels.

As our debt levels and debt service burdens increase we need more foreign currency to settle our debt service obligations when they fall due. This consequentially exerts dampening effects on our local currency’s performance hence leading to depreciation. A country with an increasingly depreciating currency has higher imports cost, which is corollary passed on to prices of goods on the market.

Countries borrow because their domestically mobilized revenues are inadequate to finance critical expenditures. This arises from a highly informal economic architecture, inefficient tax administration systems and smaller than required tax nets.

What governments have done in the past is to increase the tax burden of the few who are willing and pay taxes thereby collapsing business and causing unemployment. Surprisingly, despite the widespread technical and street view that the solution to getting increased domestic revenue is broadened tax base, successive governments have done little to stem the tide.

The solution offered by this government is to use digital solutions such as the national I.D card system. The beginning of this commitment is the aggressive manner in which government executed the national I.D card registration. In furtherance to that we have integrated the National I.D and replaced it with the GRA Tax Identification number. As indicated by the Vice President, this integration automatically raises the number of Ghanaians with Tax Identification Numbers from 4% to 86%.

This has broadened the tax base and made it possible for many Ghanaians to be identified as potential tax payers. We have moved a step forward following the Vice Presidents challenge to GRA to make the processes of filling taxes easier and simple to be done using a mobile application device. This device is available on Ghana.Gov Mobile App (which is available on Google Playstore or Apple App Store). The Ghana.Gov Mobile App is also a platform that ensures that payments for government services are done electronically and funds channeled to government accounts instead of being pilfered.

So clearly, we see the direct impact of the digitization agenda on the potential for Ghana to mobilize more revenues domestically without overburdening the tax payer. We also see how doing this could potentially cut down on our debt levels and consequently help us to attain a relatively stable currency and reduce the rate of inflation.

Digitization and job creation There is also the contention on how digitization can help create jobs or reduce the rate of unemployment. Someone even said ‘y33p3 adwuma a wose digitization’ to wit, ‘we need jobs and you are talking about digitization’. But I dare say that digitization is making it possible for many jobs to be created in both the private and public sectors.

The concept of digital technologies has come with what could be seen as the virtual means of trade, put differently as e-commerce.

Think of that young university student or graduate who does not have the required start-up capital to rent physical space or shop to ply her trade. She is able to skip this hurdle and trade using the social media platforms like Instagram, facebook and so on. Her shop is her dormitory or hostel, car booth or bedroom. She is able to advertise her products, get orders and receive payments through the mobile money interoperability with no hustle.

She has a job now and hires a delivery man to deliver the goods to the buyer, thereby creating job for the delivery man also. The volumes of trade taking place via this technologically driven medium and the number of people employed in this space could be mind-blowing. There are many people today, who have turned their home kitchens into restaurants, yet no one visits them physically to eat. They advertise using digital technology, receive orders using digital technology, receive payments suing digital technology and move their incomes to bank accounts using digital technology. This is how digitization is creating jobs.

Digitization and economic growth – GDP

Some also ask, why don’t you talk about economic growth (like gdp growth) since that is what you are known for? Yes, everything we do is geared towards enhancing economic growth and increasing the growth spurt. But quite interestingly having the desire and wish to increase growth is one thing and putting in place the systems to serve as vehicle for that economic take off is another. We keep on doing the same things in the old-fashioned away and still expect new results.

Growing up, through my youthful days to my adulthood I have been hearing rhetoric about how we are blessed as a country with abundant natural resources such as gold, diamond, bauxite, oil, cocoa and so on and still we are not developed. There have been talks about how better or at par we were with countries such as South Korea, Malaysia etc. but today are miles away from us in terms of development. While we complain about the hopelessness of the society we have created for ourselves, we equally must be aggressive in thinking outside the box to offer the most contemporary solutions to our long-standing challenges. The complaints and rhetoric will not do the magic.

How can we have increased economic activity and growth when we do not put in place systems to make trade and commerce executed efficiently and effectively with speed. Before we implemented mobile money interoperability we saw how difficult and slow it was for people to pay for services and receive money, either remittances or debt payment from one another. In an economy where velocity of money is low, economic activity is slowed down and growth is hampered. We have addressed this economic challenge with an economic solution underpinned by digital technology called the mobile money interoperability. It has made life easier, simpler, and brought efficiency into our payment system architecture.

Another way to look at this also is the use of electricity. In today’s modern world access to and use of electricity is so central to economic development. How can a society or an economy compete globally when it is designed in such a way that access to electricity is severely impaired by the lack of physical infrastructure and technologies to make it easier to be accessed?

We lived in a country where after sixty years of independence a factory or worker had to stop working for hours because electricity units are used up and vendors have gone to sleep? How do you ensure productivity and growth with this ‘bed-time-no-electricity’ mentality? Today, through digital technology, we have made it possible for millions of Ghanaians to have access to electricity from an app on their phones without having to shut engines of machines.

Digitisation and cost of credit We have had years of life in Ghana where the identity and traceability of people have remained problematic. This has imposed huge risk on borrowers, hence the higher risk premium placed when people seek bank loans.

We are addressing this problem with the national I.D and digital property address system. (Describe how banks certify borrower identity and traceability now). Ones the integration of the national I.D and the banking databases is ready, banks will have trust and confidence in a borrower’s identity and traceability. This will obviously bring down the cost of credit.

Conclusion

Let me conclude by saying that we have had decades of systems that are either malfunctioned, regressive, inefficient and not fit for modern day living. It has taken political will on the part of Government to put these new systems in place. The status quo benefits the few to the detriment of the many. Furthermore, there is little immediate political benefit from implementing these innovations. It takes some time for the full benefits of digitalization to become obvious to many and manifest in our lives. Politicians generally cannot afford to wait. The infrastructure we have put in place for digitalization is soft infrastructure. It is not like a road or a bridge you can point to. But it is a powerful and an expanded highway for development.

It is making it easy and simple to renew your national health insurance membership without having to travel to join long ques and pay bribes It is making it possible for you to check whether or not the car you want to buy is insured

It is making it possible to buy for your electricity units irrespective of your location or time of the day.

When the e-pharmacy is done it will afford you the chance to find which pharmacy has your prescribed drug and whether it is FDA approved or not with ease It is making it possible for all, particularly rural settlers to apply for government scholarship and receive same without travelling to Accra It is making it possible for taxi and okada riders to pick any customer and receive payments irrespective of the telecommunication company they have their mobile money accounts with