Across the globe, it is
perhaps true the majority especially the youth are in search of a job. However,
no nation is poor because other people has monopolize the wealth of the nation.
This myth has been with us for some time and now palatable to the ears
and feelings of citizens especially, in the context of developing economies
that the government is capable of creating jobs.
Over the years governments all
over the global, especially developing economies have been burdened to fulfill this myth. Any time you are told government is creating or will
create job, just know that it is a hoax. Government exists to create conditions
that will help the firm (here l referred to businesses)
to flourish in order for them to employ labour. Where this significant
arrangement failed, the influence of the firm to support wealth creation of a
nation goes down and living conditions of the citizenry is affected negatively.
In
really, the government create an enabling environment here in refers to us
policies and ensuring the enforcement of such policies and regulations. The
irony is that, politicians in these countries always imply the issue of job
creation in their manifestos and or what can be otherwise referred to us
campaign promises. Unfortunately, there are always missing phrases on
regulations and policy implementations to ensure stable economies and which will eventually
protect businesses in the countries.
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The panic reaction is government providing short-term gap measures to lessen
the plights of the citizenry. Government means of providing these services are
through loans, aids, grants, foreign direct investments, taxes and levies. When government
promises jobs, then it’s a hoax asserted Brennan Sorge.
All over the world, new forms
are constantly being made, and older ones are dissolving, but all are shapes
assumed by one thing - the thought of man. What do we think about the new
order?
Today, the world has enter the
forth industrial era thus Industry 4.0 (the era of automation and optimization).
Are the youth prepared especially in Africa to respond to the new business
models?
Currently, most developing countries have over exploited the debt
instruments both at domestic and international levels. Despite, developing
countries especially in Africa for the past decade had seen their gross
domestic products grew at estimated average of 5% year on year, these countries
have not recorded much development over the same period.
In these countries, you would have witnessed high unemployment,
inequality, crime, corruption, "political supremeness", economic and
political instability, high poverty and related incidences etc. These are common spectacles and denominators we all have witnessed in these countries and of course
some of us are living in. The condition created is referred to as “growth without development ".
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| Photo credit: careerwise.ie |
The bizarre situation of governments of these countries is, the large
part of the gross domestic income is being used to service the accrued interest
due. And the rest is consumed by over bloated government "wage
expenditure". Most of the foreign direct investments either go to
government initiated projects and public wages
which are not economically viable or to support the activities of transnational
organizations that at a period repatriate these investment in a form of profits
to their mother companies. Hence in these
countries capital flight is high. The reason being that, the economies of such
countries is volatile and or unstable. As
a result, the local currency is under pressure. Another ‘window’ is high currency instabilities and depreciation of
local currency against all major trading currencies. And this frustrate local and
start-up businesses forcing them to closure.
To madden the situation at the
same period, the growing middle class is growing love to spend. Tastes and
preferences are so important for understanding the behavior of the middle
class. Since the firm is non-functional in
these countries, government import bills are sky rocketing
and partly contributing to the instability of the local currencies as being
witnessed in these developing economies.
Government behaviour had also affected the
financial sector. The biggest client of the financial sector in these countries
is government. In that regards, the common spectacle
is that interest rates remain high even though inflation is going down and the
central banks in these economies base rates are being lowered. The
nonperforming loans provision on the balance sheets of these banks is
heartbreaking. Businesses can't procure capital at such a cost. The situation then
force businesses to diverse into new areas of businesses - importation. Most businesses, will prefer to import finished goods
from countries like India, China, Bangladesh, Thailand, and Taiwan and focus on
the distribution channels as route to turning around capital invested.
The agriculture sector which used to be the royal diadem of these
countries is deteriorated over the period. It is claimed to be the reservoir of
labour employment now marginalized and only lips service is paid to it. The
value chain is not developed to benefit the labor absorption. Even those with
courage and pushing their souls to survive are beginning to look for other
alternatives. Some of the issues faced are post-harvest losses, inappropriate
technology and innovation, high input
prices, lack of access to market, poor yield quality, etc. As a result, the
consumer price indices in these countries are
very high. This serves as a fuel for the high inflation witnessed in these
countries. In some of these developing countries facing leaping economics and
volatility, cost of living is high and standard of living becomes low. For example, with statistic from numbeo.com
comparing India and Ghana, Consumer Prices Including Rent in India are
55.42% lower than in Ghana. However, Purchasing Power in India is
198.38% higher than in Ghana. To put this in perspective, in my experience in India, Bangladesh, Colombo etcetera,
cost of goods and services are on average 2-3 times cheaper compare to Ghana.
Transportation for a destination of 5 kilometers
cost 10 rupees (that’s about an equivalent of GH₵
0.80 (80 pesewas, Ghana currency)) while in Ghana the same destination length
of 5 kilometers cost 2
Ghana Cedis).
The fortunate or unfortunate situation is that some of these countries
have discovered new resources such as petroleum, iron ore which are largely non-renewable resources with expiry dates stamped on them.
Government is at a point of looking to more sustainable ways to finance
its expenditure. The first option these countries may be looking at critically
is taxes and levies. And this create tax burdens on the majority. And government has never been creative about anything
in its operations in these countries. With this underlying forces and factors,
we foresee citizens of these countries paying more for
services rendered by government to them. The other challenge existing
in this countries is the tax loop-holes created. While the large part of this countries’
economies are made of the informal sector, there is high in-adequateness of
regulations and proper management of these sectors.
This will usher these economies into what we coined as Citizens Tax
Fatigue. Currently, sections of the
citizenry have started complaining about the unfolding phenomenon. Citizens may
refused to pay the taxes and levies because of loss of trust in their
governments. Therefore, it is imperative for
government to allow the legal system work to give confidence to both citizens’ confidence and
trust and as well business communities to
operate.
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Finally, government revenue from taxes and levies will increased. To translate this
into perspective, these economies would
be better placed to achieve "growth with development" by
satisfying the aforementioned conditions. In so doing government will become
less burden to function the way it is designed to function. In the long run,
the economies of these countries will be well position to favor employment of
it citizens and creation of more industries. The engine of every country’s
economies were/are built by the private sector participation. No countries
government can promise to provide jobs to it citizen if there are no better
policies and good government machineries protecting and providing the enabling
conditions to businesses to function.
Therefore, for citizens in
these countries to thrive, there need to be citizen participation in government
and hence citizenry must hold their government or leaders responsible and
accountable for right policy implementation for businesses to dominate. By
doing that, jobs can be created. The role of government is to prepare and adopt
policies that support business growth. The myth of government job creation is
therefore a hoax!!!
About the Authors:
Jasper Tetteh Ahafianyo holds a Master’s Degree in
International Public Administration and Management from Tsinghua University,
Beijing, China and Bachelor of Science Degree in Finance from the Ghana
Institute of Management and Public Administration. Jasper worked with the
School of Public Service and Governance, GIMPA as the Program Advisor in charge
of Danida Fellowship Training programs, and other capacity building programs.
Jasper now works with the YALI West Africa Regional Leadership Center as the
Curriculum and Content Development Manager. He has over ten (10) years of
teaching, consulting and advisory experiences. Jasper also has practical
experience in writing teaching cases with the Beijing Case Center located at
the School of Public Policy and Management, Tsinghua University.
Promise Edem Nukunu is a published Author. He has three
books to his credit including ‘Driving into Greatness’ and ‘Fighting for
Freedom’. A Co-founder of CedarHill Education and Research Institute and serves
as the Head of Training and Capacity building for Medical Journalists’
Association-Ghana. Edem is a YALI fellow and successfully completed Public
Policy and Management program from the YALI Regional Leadership Centre at The
Ghana Institute of Management and Public Administration (GIMPA). He holds a
certificate in several management areas including a professional Certificate in Social
Entrepreneurship and Project Management.
