The China Factor in Ghana's Textile and Construction Industries

Abstract

The study engrossed itself with the central question: What has been the impact of the China-Ghana economic relations on the performance of Ghana?s textile and construction industries? Several subsidiary questions to this are: What is the nature and content of the relationship with respect to trade, investment, and aid? In what way is the engagement complementary, and or competitive? What are the reactions of Ghanaian textile and construction industries to the recent trend in the relationship? What are the Ghana government?s economic (industrial) policies that are aimed at promoting the local textile, and construction industries? These questions stem from the claim by industry players and observers that the influx of foreign textiles, particularly the Chinese, is militating against the performance of the Ghanaian textile sector. Besides, it is also claimed that the increasing infrastructural financing by the PRC (and other states) and subsequently taking up of projects (by foreign construction firm), particularly the Chinese, is incapacitating the Ghanaian construction industry.

Toward responding to the above questions and claims, available data on Sino-Ghanaian relation (and the wider Sino-African relationship) gathered from various texts and sources was augmented by data collated and analysed from a fieldwork conducted in Ghana, for two months, June through August,2009. Empirical evidences collated indicate that the China claim in the Ghanaian textile industry is exaggerated to the neglect of pressing endogenous hindering factors that need to be tackled like high cost of production, smuggling, and inconsistent government policies. More so, the decline of the textile industry started earlier than the Chinese textile influx. Meanwhile, the incapacity of the Ghanaian construction sector is due endogenous factors such as inadequate leadership, delay in payment of contract executed, inability to acquire heavy equipment (and or the use of obsolete machinery),high cost of raw materials, poor quality of works, professionalism ,lack of innovation and technology transfer. Contrary to the popular notion, China?s role in the textile industry is blown out of proportion. Besides, the Chinese construction firms are overall cost competitive than their Ghanaian counterparts, hence their increasing winning of bids or undertaking of projects in Ghana.