The Chamber of Agribusiness Ghana (CAG) has described the One District One Factory (1D1F) programme, which was a flagship industrialisation plan, as a policy failure.
The Chamber made this declaration after it conducted a comprehensive review of the programme, calling for the urgent establishment of a National Industries Development and Regulatory Authority to prevent recurrence of failed industrial policies to position the country for genuine industrial transformation.
CEO-CAG Anthony S. K. Morrison said though 1D1F was presented to Ghanaians as the nation’s industrial breakthrough – promising job creation, enhanced competitiveness, import substitution and export growth – the programme has instead entrenched high-cost production, debt distress and widespread factory underutilisation.
“Our assessment reveals the 1D1F programme constitutes not only a policy failure but also an economic misstep, which weakened Ghana’s industrial sector rather than strengthening it. It was claimed to support industry while creating a policy environment that made industrial production more expensive, riskier and less competitive.” he noted.
A statement issued by the Chamber asserts that the 1D1F programme’s most damaging flaw was the cost of capital.
It says industrial firms accessed financing at rates ranging between 22-47 percent: including fees, foreign exchange exposure, rollovers and compounding.
These rates, CAG maintains, are fundamentally incompatible with industrial development – particularly in agro-processing sectors that require five to seven years to stabilise and operate with assets having 15 to 25 year lifespans – noting: “At such rates, debt service overwhelms cash flow before economies of scale can be achieved”.
Mr. Morrison disclosed that successful industrialising nations provide manufacturing finance at three to eight percent. For instance, China’s policy banks offer three to five percent for strategic industries. Vietnam provides five to seven percent for export-oriented manufacturing.
India’s MUDRA scheme finances MSMEs at seven to eight percent. Rwanda’s development finance operates at five to ten percent with extended grace periods.
However, Ghana’s 22 to 47 percent rates make industrial competitiveness mathematically impossible.
CAG concluded that industrialisation cannot succeed when financed at rates between 22 and 47 percent, burdened by bureaucratic complexity and unsupported by skills development and local content frameworks.
According to the Chamber, 1D1F failed because capital was priced like speculation, incentives were diluted, value chains were ignored, productivity capabilities were overlooked and political considerations overrode economic logic.
“Factories alone do not create competitiveness. Affordable capital, secure inputs, streamlined regulations, skilled workforces and patient, evidence-based policy do.”
The Chamber noted that, by achievement, the 1D1F programme established physical industrial infrastructure in districts that previously had none, elevated industrialisation as a national priority and generated public discourse about manufacturing’s role in economic development.
Though some factories achieved operational stability and contributed minimally to the local economy, the programme only demonstrated political will to pursue industrial policy – a necessary precondition for any transformation agenda.
By recommendation, CAG calls for the immediate establishment of a National Industries Development and Regulatory Authority – mandated to ensure industrial financing aligns with international development finance standards and coordinate raw material value chains before factory commissioning, including contract farming, production zoning and input supply systems.
The proposed Authority will also implement comprehensive local content policies and competitive incentive frameworks that prioritise indigenous industrial start-ups, develop skills programmes aligned with industry needs for sustainable productivity and streamline regulatory processes across agencies through single-window clearance systems among other key interventions.
