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Don’t mind the prophets of doom, who say, “a 24-hour economy is impossible.” It is possible! We are, after all, Nkrumah’s children: Yente gyai – “we don’t hear stop”. We just need to know what a 24-hour economy is and is not, and what its main drivers should be. And off we go!
For starters, a 24-hour economy is NOT the same as a night-time economy, which is part of the 24 hours. And no matter how big a 24-hour economy might be, the bulk of its main business activities and job creation will take place in the day-time economy, including the weekends, with night-time extensions playing a supplementary but crucial role.
In the world’s largest 24-hour economy (the United States), for example, only 27% of the labour force work nights. Yet, together, the day and night economies make a “dynamic duo,” creating perhaps the world’s most flexible formal labour market and giving both workers and job seekers, including students, virtually limitless options to choose from. Powered by this combo, America’s GDP, the biggest in the world at $25.6 trillion, is larger than that of the 27-country Euro area, which has a bigger population but not much of a 24-hour economy.
Building a 24-hour economy thus does not mean the end of the day-time economy (or chop bars at dawn). It only means the purposeful expansion of industrial activities, such as manufacturing and allied services like trucking, as well as high-value technical services like ICT, architectural services, and financial services, beyond the day into the night to meet rising domestic and international demand. In the US, for instance, some banks provide regular banking services in the day and process passport applications and other services for the Federal government overnight.
Exclusively night-time economies, mainly of the entertainment kind, are favoured by cities to complement other day-time activities (industrial or services) and to promote tourism in particular. These too have their place, especially for local governments, in a 24-hour economy for a country like Ghana, where tourism strategy is built around the narrow legacy of slavery and a few poorly organised festivals (and lately even funerals, a crazy idea). A more diversified tourism strategy, supported by a modern and globally competitive hospitality and travel industry, is needed to support a 24-hour economy across Ghana, not just Accra.
Nor is a 24-hour economy about haphazard financial handouts to businesses by government, which is broke anyway and will be for a long time. In the past, funds meant for “distressed businesses” were misused by unscrupulous beneficiaries, some of whom bought homes abroad with the funds. Another “entrepreneur” reportedly donated 10% of a subsidised loan to a church as tithe before spending even a pesewa on her business.
Government assistance to businesses in the building of a 24-hour economy must, therefore, be a prudent mix of the financial and non-financial, with objective and rigorous criteria for selecting beneficiaries. The best strategy, however, remains a Conducive Conditions Strategy (CCS), which emphasises reliable utility and other (public) services to allow the greatest number of entrepreneurs to rise and to thrive on their own anywhere in the country without government handouts.
Overall, the most effective strategy for creating a 24-hour economy must be informed by Ghana’s recent economic history, its collective aspiration to become a high-income country by 2057 (as outlined in the 40-Year Plan), and the need to build economic and institutional resilience in a global economy that is in perpetual turmoil.
The 11 factors listed below as the key drivers for a 24-hour economy must therefore be supported by simultaneous policies for social development (such as education and training); environmental development (such as spatial planning and the preservation of the natural environment); and institutional development (such as better public safety, effective decentralisation, and a credible assault on public sector corruption).
1. Electricity: Abundant, reliable, and affordable electricity is the lifeblood of a 24-hour economy. Sadly, the government has missed critical targets for electricity use as the driver of economic growth in the past seven years and is unlikely to overcome that any time soon. Fortunately, the 40-Year Plan contains policies and strategies that can help close the gap substantially, if not completely. But extensive governance reforms in the broader energy sector will be required. For example, the CEOs for ECG, GRIDCO, and VRA must be hired professionally, not appointed politically, and signed to performance contracts to deliver or be fired. Better to displease three people than to disappoint 33 million Ghanaians.
2. Infrastructure and Logistics: Goods and services once produced (largely as a result of available and stable electricity) must be transported and distributed efficiently to consumers, at home and abroad, through physical and virtual infrastructure, governed by appropriate systems and regulations (logistics). The decline of Ghana’s physical infrastructure over decades makes this task daunting. A typical cargo truck in Ghana, for instance, crawls at only 18 mph, instead of the optimal 55mph, which partly accounts for Ghana’s weak global competitiveness. But, as with the shortfall in electricity use, there are solutions: strategic short-term interventions can mitigate these challenges enough to facilitate the beginnings for a 24-hour economy, while medium- to long-term solutions are pursued.
3. Exports: Without an aggressive export development agenda, a 24-hour economy is doomed to fail. Local demand, even in large-population countries, is never enough to sustain a 24-hour economy, which explains why, for instance, the US Trade Representative operates from the White House, where the president can use his power to open up markets for US exporters. Every $1 billion in US merchandise exports creates 6,000 new American jobs, while $1 billion in service exports (such as tourism, music, movies, and education) creates 4,500 new ones. Ghana’s export policies and strategy, by contrast, have been weak, plagued by inconsistencies, crass politicisation, and corruption. This is a threat to a 24-hour economy.
4. Local Economic Development (LED): The national economy is the sum of all local economies. To grow the national economy thus requires purposeful growth of local economies. Yet, this obvious truth has for years been lost on policymakers, who disproportionately direct national development resources to Accra, to the neglect of the rest of the country (Over 85% of foreign direct investment, for instance, goes to Greater Accra Region alone (mainly Accra and Tema), while nearly 70% of all finished goods in Ghana are produced in the region). The result is a region/city operating beyond its capacity and choking on its inefficiencies. For a 24-hour economy to be beneficial to all Ghanaians, growth opportunities must be created nationwide through LED.
5. Small and Medium-Scale Enterprises (SMEs): A focus on SMEs should not mean a neglect of large firms. Both will play critical roles in a 24-hour economy. But their needs and capabilities differ. For instance, while large firms can afford to hire lawyers and accountants to navigate government red tape, such services come at a great and often unaffordable cost to SMEs. SMEs also face a much bigger challenge in acquiring skills (hard and soft; as well as managerial and professional); entering foreign markets; and accessing just finance, as they’re subjected to punitive interest rates by lenders. Government support for SMEs in Ghana also tends to be unduly centralised and fragmented, undermining the constitutional role of district assemblies to lead the economic development of their communities. Chiefs in particular should champion the case of LED under a 24-hour economy.
6. Employment Act: Originally proposed in the NDC’s 2020 Manifesto (the first of its kind in Ghana), an employment act will serve two purposes: (1) Provide the legal framework for policies to create jobs in a 24-hour economy, and (2) fill a void left by the current Labour Act, which focuses primarily on conditions of work and not opportunities for work. The new Act should also facilitate the formalisation of the Ghanaian economy by guiding policy away from vulnerable employment to secure or wage employment, which is associated with decent work and poverty eradication.
7. Markets Modernisation: Markets constitute the core of Ghana’s retail economy, and in many districts, they (along with their associated lorry parks and petty traders) are the main sources of local revenue. They also constitute the critical link between what will be produced in a 24-hour economy and how to get them to consumers (wholesaling and retailing). They tend, however, to be chaotic, inefficient, and bedevilled by sanitation challenges, despite the fact that traders pay daily tolls to their assemblies. Fortunately, former president John Mahama has a head start on this, with his transformation and modernisation of the Kumasi Central Market. He has promised to expand his Market Modernisation Programme to the rest of the country if re-elected. It should form a major building block of the 24-hour economy he has proposed.
8. Civil Service Modernisation: There can be no productive private sector, least of all for a functioning 24-hour economy, without a civil service that is efficient and responsive to the needs of businesses. The disconnect between the two has been the bane of Ghana’s economic growth and transformation over decades. In the take-off phase of a 24-hour economy, targeted reforms in the civil service to facilitate the various catalytic initiatives from the government will be required – at the national and sub-national levels.
9. Agricultural Modernisation: Agricultural policy should focus on efficiency, which increases productivity (farmers using less inputs or better techniques to produce more), with the objective of increasing output (for food self-sufficiency and industrial inputs), raising rural incomes, and reducing rural poverty. This means government, among other things, providing critical support services, including extension services, in a fair, transparent and efficient manner. For the youth, employment-creation opportunities should focus on “secondary agriculture,” or agro-processing, which has a greater potential for growth to meet both domestic and external demand and create the kind of high-paying jobs that are not readily available in “primary agriculture”.
10. Stronger economic policy framework: The framework for economic policy-making in Ghana has always been fragmented and ill-focused, with disproportionate attention to macroeconomic policies (fiscal and monetary), and very weak, sometimes even counter-productive, links to sector policies, which directly drive economic growth and create jobs. The current obsession with a deficit- and debt-GDP ratios and misguided efforts by the Bank of Ghana to fight inflation by needlessly punishing businesses with killer interest rates is a classic case of a disconnect between macroeconomic policies and sectoral policies, which in turn must be shaped by sound development planning. A 24-hour economy will require a revolution in economic thinking and policy-making, including planning, implementation, and monitoring.
11. A productivity revolution: The 40-Year Plan proposed a “Productivity Development Strategy” as one of 13 catalytic initiatives to unleash the creative and entrepreneurial spirits of Ghanaians. Nothing became of it. It is not too late to apply Sankofa principles, mindful of the fact that without purposeful growth in productivity, none of the drivers discussed above would be fully effective, much less sustainable. As a recent World Bank report said, productivity is the single biggest determinant of differences between rich and poor countries, a fact which has gained greater global attention since COVID-19. We ignore it at our own peril.
“What others have done, we can do.” – Marcus Garvey
