Shortage of raw materials and financial challenges are grounding a number of factories under the One District, One Factory(1D1F) policy, The Fourth Estate has found.
These factories, located in the Central, Ashanti and Western regions are into the production of cooking oil such as coconut oil, palm oil and palm kernel oil; soap, fruit juice, and detergents.
They include both newly built factories and old ones that had received capital injections from government-approved credit facilities.
However, challenges with the availability of raw materials and funding means many are either shutting down or cutting down their production figures while laying workers off.
Others are also forced to import raw materials at a time the cedi is fluctuating against the country’s major trading currencies, making their sustainability unpredictable.
With President Nana Akufo-Addo and the New Patriotic Party (NPP) trashing Mahama’s administration for failing to do due diligence on raw availability before it pumped $35 million into the revival of the Komenda Sugar Factory, it has become obvious that no lessons were learnt in the ambitious industrialisation drive under the current administration.
The 1D1F initiative is in fulfilment of a 2016 campaign promise of the ruling party to establish, together with the private sector, at least one industrial enterprise in each of the administrative districts of the country. There are currently 261 districts.
The government’s paper tigers have used tax waivers and financial support among other incentives to woo entrepreneurs to pursue the policy, but some of these entrepreneurs who are into the initiative say they have regretted their involvement.
In the following report, some members of the second cohort of the Next Generation Investigative Journalism Fellowship, reporting for The Fourth Estate, visited some 1D1F facilities across the country and recount the ordeal of some of the factories.
Fiase Oil Palm Processing Factory— Tarkwa-Nsuaem Municipality
Inside the Fiase Oil Palm Processing Factory, a common user facility in Tarkwa in the Western Region, four electricians were busily pulling wires around an equipment.
They told The Fourth Estate their work was to pave the way for the opening of the factory meant to process palm nut into palm oil in December 2022.
The Assembly Member of the area, Ebenezer Yeboah was, however, worried about the non-availability of palm nut for processing.
He said the community had abandoned oil palm cultivation and was now into cocoa and rubber plantations.
“There is no oil palm plantation here, but we are still in the process of lobbying with the assembly that the assembly itself will acquire land so that when it starts working it will generate revenue for the assembly”, he said.
He wasn’t optimistic about the number of people who could be employed either.
“Looking at the size of the factory, even if everything is done, how much employment [sic] is it going to create?” he asked.
Feanza Industries – Ellembelle District
Feanza Industries at Esiama in the Ellembelle District has existed for over twenty years, producing virgin coconut oil for retail and wholesale. From afar, the factory looks rickety, abandoned and non-operational, but a few steps into the factory shows that work goes on inside.
As though the deplorable nature of the facility is not enough, Feanza is also struggling to get raw materials.
Kaku Kyiamah, the Managing Director of the coconut and palm kernel oil-producing factory, said illegal smuggling of coconut from Ghana to neighbouring countries and the increasing prices of coconut were affecting their production.
However, he did not want to comment on the company’s position on the 1D1F.
The company has 20 staff as against 40, which the government indicated in its 1D1F data in response to The Fourth Estate’s right to information request.
Ameen Sangari –Cape Coast metropolis
Ameen Sagari, the oldest and the only manufacturing company in Cape Coast has been in business for more than a century and has fallen on hard times and folded up and revived many times. In 2021, the government offered it a bailout under the 1D1F project. It is unclear how much it got from the 1D1F rescue package because its officials would not disclose it.
But information available shows the company requested $3.8 million to revamp its palm oil, palm kernel oil, vegetable oil, soap and detergents production lines.
It appears it is yet to find its feet. Its main raw material is palm nut, but that is in short supply in Ghana.
“We used to buy raw materials locally, but because there has been a shortage since August . We now import from Ivory Coast,’ the company’s Secretary, Rita Esi Mensah explained.
Ms Mensah said the exchange rate was not favourable to the company so it had to drastically cut down its import of raw materials and ultimately its production lines.
The decision resulted in a lay off of workers.
“We used to have more than 200 people over here and we had different departments, including the transport department, maintenance, soap, our farms and oil mills departments, but most of our staff have been laid off because we stopped producing,” she said of the company’s gloomy situation.
At its peak, the company could produce about 50 tonnes of palm oil a day.
The 1D1F Secretariat’s data shows it employs 75 people directly and 125 indirectly.
On the ground, however, only 30 people currently run the company, which is also struggling with broken down machines.
Central Oil Mills –Upper Denkyira East municipality
Between 2020 and 2022, the Central Oil Mills located Jukwa Mfuom received GH₵ 14 million from the Ghana Exim Bank to support its expansion drive. The funding went into building a new factory at Ansamanso to produce palm oil.
The Administrative and Logistics Manager of the company, David Henry Sagoe, told The Fourth Estate that the company was currently operating below its capacity because of seasonal availability of raw materials.
When the time 8JH The Fourth Estate visited the Jukwa Mfuom factory in November 2022, Mr Sagoe said the last time the factory produced goods was in September 2022.
However, when the team visited the Ansamanso factory, there was no production.
Incentives that never came
Lesdy Company Limited – Gomoa East District
The challenges are not just about raw materials. Financial constraints are also hindering some of the 1D1F companies.
In January 2021, Lesdy Company Limited, a tissue manufacturing factory located at Gomoa Buduburam in the Gomoa East District started production as a public-private partnership under the 1D1F initiative.
Before the factory was enlisted under 1D1F policy, it was promised tax exemptions on all imported machines and a five-year tax holiday as part of the benefits.
However, Eric Darko, the company’s Chief Executive Officer, said when it imported its machinery, the company sent a request for tax exemptions but nothing came out of it.
“Their process for paying the taxes is not clear and even if it is clear, practically, it does not work. For me, it is one major benefit for people who decide to go into manufacturing. So, if for instance that benefit is there on paper, but it is very difficult to get it, then that is a problem,” he bemoaned.
Bodukwan Multi Food Processing Company – Atwima Kwanwoma District
When The Fourth Estate visited the premises of the factory, drums of concentrates were found in the warehouse without any activity at the processing plant.
The company was established in 2020 as part of the 1D1F initiative to add value to about six varieties of fruits and vegetables, including mango, pineapple, watermelon and tomatoes. To further this goal, The Fourth Estate learnt the company set up its mango plantation at Bonte in the Nkoranza North District in the Bono Region and a pineapple farm not far away from the factory.
But the team found in November 2022 that the GH¢45-million factory had been inactive since May 2022.
The company’s Production Manager who wouldn’t give his name declined to speak to the issues.
However, a source within the company said its hiatus was because “mango and pineapple were unavailable,” and added that the processing factory only worked when fruits were available in season.The team was also told that there was an ongoing installation of new equipment.
Kaskazani Company Limited—Bekwai Municipality
Kaskazani Company Limited, which is located in the Bekwai municipality, was set up to produce palm kernel oil. It secured funding from the Ghana Commercial Bank.
However, when The Fourth Estate visited the factory in November last year, only three employees were working.
None of them were willing to talk to The Fourth Estate. However, the Municipal Engineer at Bekwai Municipal Assembly, Aboubakar Ahmed, said the company resorted to using local equipment after machinery it imported from India broke down weeks after installation.
That, coupled with the delay in the release of the loan the company applied for, made the company’s production unsteady, he told The Fourth Estate.
He said the owners of Kaskazani were looking for a partner to strengthen the company’s operations.
Locals are unhappy about the fact that none of the company’s 11 employees are from the community.
“We know that the government brought the 1D1F initiative to help boost employment in the communities the companies are in. But that is not our case,” a former employee, who only gave his name as Frank said.
Given the lofty ideas that underpinned the 1D1F, the current situation calls to question the government’s monitoring mechanisms to ensure that the loans it guaranteed some of these private entities do not become another financial albatross on the taxpayer.
The authors of this report: Victoria Enyonam Adonu, Edmund Agyemang Boateng, Thelma Dede Amedeku, Marian Bangura, Norah Aluayo Kwami & Victor Jones were fellows of the NGIJ Fellowship.
The Next Generation Investigative Journalism (NGIJ) Fellowship is an initiative of the Media Foundation for West Africa (MFWA). The first two cohorts have so far benefitted early career journalists from Ghana, Liberia and Sierra Leone.
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