On 1st February 2011, Prof. Thomas Campbell, as a part of the Ashesi Economic Lecture Series, led a discussion on strategies for spurring economic development in Africa. Prof. Campbell is a former United States Congressman and former Dean of the University of California, Berkeley, Haas School of Business and is currently a visiting professor at the Chapman University School of Law. Prof. Campbell met Ashesi founder, Patrick Awuah, while Dean of the Haas School of Business, where Dr. Awuah went to business school. He has followed Ashesi over the past eight years and taught courses at Ashesi on three occasions.
Prof. Campbell started the discussion by pointing out that Africa has a great deal of potential for growth. One underlying comment he made was that Africa does not need to depend on foreign investment. If Africans invest wisely in their own economies a lot can be accomplished. He revealed that the rate of return of investment in Africa between the years 2005 to 2008 was 5%, whereas Europe experienced a lower rate of 2%. However, he pointed out that the accumulation of capital in the form of savings is essential for investment to be possible.
Prof. Campbell also touched on the issue of political democracy and stability in Ghana. He mentioned that this was the driving force behind the increasing levels of foreign investment in Ghana. He urged that the entire nation continue in its dedication to free & fair elections, so that Ghana would continue to stand out, attract investment and expand its economic base.
Another point Prof. Campbell stressed was that African countries need to have a minimum efficient scale which enables low cost production. He stated further that Ghana should consider integrating with other West African nations to build a larger regional economy which would help reach minimum efficient scale. Nations could look to share infrastructure costs such as railroads and electricity which would increase the productivity of the whole region.
Prof. Campbell also commented on the new-found oil in Ghana. Inasmuch as oil is an opportunity to generate revenue, it could become a threat, if mismanaged. He suggested that the Ghanaian government could set up an independent savings account or trust which could be used for specific purposes only; such as the financing of infrastructure. Another approach to managing oil revenues he recommended was based on a model used in the State of Alaska in the United States. Following this model a state sets up bank accounts for each citizen, and each year citizens receive an equal payment based on oil revenues. He stressed that this sort of approach would prevent any financial loss to the state because each citizen would watch diligently to ensure they received their annual payment.
His concluding words were, “I am proud to be associated with Ashesi and proud that it is associated with the University of California”.