There were two things constant in my life as a child, books and music. One of the effects of this early introduction was a child-like obsession with Madonna. For me, she was the ultimate woman; beautiful, stylish, and a voice from God. That obsession has disappeared; replaced with an acknowledgment of her undeniable talent and recognition that time is usually a woman’s worst enemy. Today, if you ask the average ten year-old who he has a “crush” on, he is more likely to mention names like Rihanna, Nicki Minaj or Genevieve; proof that the world moves rapidly, and has no time to pause to remember the past.
Delegates from 16 African countries spent most of this week in Accra, discussing the benefits of establishing a movable asset registry. Anyone who has read De Soto’s Mystery of Capital and/or Acemoglu and Robinson’s Why Nation Fail will understand the importance of this initiative. A movable asset registry is one of the easiest ways to help businesses unlock the capital needed for economic growth. In sub-Saharan Africa, 80% of a company’s assets are movable, and usually worthless to lenders, while 20% are usually in land and buildings. However, 75% of all collateral comprises of land/buildings while 25% are movable assets. The establishment of such a registry will allow businesses use these movable assets as collateral because lenders can register their interest on them, an easy way to unlock capital.
An example is a photographer whose assets are cameras, lights and a contract with the government to take pictures of government officials for the next two years. He does not own a house, or land in Ikoyi. Today, his assets are worthless to lenders, so he cannot raise the money needed to grow his business; with a movable asset registry, that problem is half solved
The venue of the conference was not accidental; Ghana is the first African country to establish a movable asset registry. The registry has helped the creation of loans worth over $7.6 billion to almost 80,000 businesses. If you need further proof of Ghana’s attractiveness to the global financial markets, look at aviation. Sir Stelios, the founder of the low cost carrier EasyJet, recently announced plans to invest $500 million in low cost carrier linking West African countries with its hub in Ghana. I am sure he got a lecture on investing in Nigeria from his fellow knight, Richard Branson. This is only one of several examples of Ghana’s growing influence. Nigeria might be the most populous black nation in the world, with an “attractive” market of 160 million people. It might be the home of the largest proven reserves of oil and gas in Africa, but it is no longer the most attractive investment destination in West-Africa.
In 1983, the government released an expulsion order that gave illegal immigrants 14 days to leave Nigeria; and Ghanaians were the most hit. In a shameful show of Xenophobia, we scorned them and most had no choice but to return home. Today, Nigerians are complaining about a Ghanaian trade policy that is perceived to be targeted at them. The Ghanaian Foreign Investment Act of 1994 states that all foreign businesses must be registered with a minimum of $300,000. Last month, the Ghanaian government started implementing this policy by closing down businesses that did not meet this requirement; as expected Nigerians were the worst hit.
Apart from growing up idolizing Madonna, I learnt the plastic utility bag with matching plaid patterns were called “Ghana Must Go” bags. It means many things to many people. To some, it is reminder of how Ghanaians were shamefully chased out of Nigeria. To others, it is a symbol of greed, and the medium for bribing corrupt government officials. To the fashion aficionados, it is proof of how Ghanaian artist, Senam Okudzeto’s work inspired the 2007 Louis Vuitton collection designed by Marc Jacobs.
History is being re-written, and at a furious pace too. We grew up listening to Nigeria being described as the giant of Africa; our children might grow up wondering where that giant went.