Opening Of The Unilever Soap Factory

Tema, August 24, 1963

I am glad of the opportunity of opening this Factory today. It is one more proof of our ability to attract to our country, under conditions of independence, investment of a type which we never had before. This fine and efficient Factory is not the result of charity from one of the more developed countries of the world.

It has been built – let us be frank by one of the most hard-headed business combines operating in Africa today. They have built it because, they believe that their investment will be safe in Ghana and that they will make a fair profit from their enterprise. It is the skill and know-how of Lever Brothers which is responsible for the construction of this valuable asset to our economy; but, however great their financial resources, however extensive their technical experience, this Factory would never have been built but for the political skill and sagacity of the ordinary people of Ghana. Let us never forget that it was they and they alone, who secured our independence and thus created the basic conditions which made possible a commercial investment, of the magnitude of that which has been responsible in this enterprise.

It is, however, not only the favourable climate for investment, created by the Government of Ghana, which has resulted in industrial development such as this soap factory now before us. The educational policy inaugurated by the Convention People’s Party in 1951, when for the first time we had a limited degree of control over our own affairs, is now bearing fruit. We have a growing number of skilled technicians and in some fields, the technical ability of our workers can today compare favourably with that of any country in the world. This is an important factor in encouraging foreign investment. After all, it is the labour efficiency of each and everyone of us, skilled or unskilled, which will be the decisive factor in our development. The ability of the Ghanaian citizen must reveal itself in work. Love and respect for work and concern for state and co-operative property must be the cornerstone and backbone of our Ghanaian society. Education and labour must go hand in hand. To the Ghanaian, therefore, work must not only be an obligation, it must be also a civic duty. “By the sweat of thy brow thou shalt eat bread,” so goes the biblical saying.

In order to pay a tribute to the importance of labour in the development of Ghana, the Government has decided to institute a special order to be known as the “Order of the Black Star of Labour.” This honour, the details of which will shortly be announced, will rank among the highest honours of the State. It would be unfair, however, to restrict those eligible for this honour to persons who have had the good fortune in the past of obtaining a technical or professional education. All workers, whether they are school teachers or street sweepers, crane drivers or doctors, farmers or fishermen, will be equally considered for recommendation. It is immaterial whether they are engaged in Government service or private enterprise, or whether they are of managerial, supervisory or operative status. The Order will be awarded for really outstanding work in any field and will entitle the winner to be described as “the outstanding worker of the year.” Let us hope that one of you here employed in this soap factory will be among the first to win this high distinction. And l say this with genuine feeling, for I shall never forget my own experience as the lowest paid labourer in a soap factory, nor my disillusionment when I discovered that soap particularly at the low level where I came in contact with it does not always smell so sweet and fresh!

I am pleased to open this Factory because I believe that the very fact that it has been built in an independent African State is proof of a new relationship with foreign investors which has been established through the liberation of a great part of our Continent.

The Unilever Group have a long history of association with Africa. They began their operations in our part of the world — and again let me be frank because they wished for a cheap source of raw material for soap, which they manufactured in Europe and sold back to, among others, those very countries from which they had so cheaply exported the raw material, at a price which showed a handsome margin of profit. Starting from this comparatively modest beginning with soap, Lever Brothers have gradually accumulated the capital which has, in our own day, produced a financial giant. The first Lord Leverhulme’s endeavours to establish African plantations to provide raw materials for the European industrial enterprises of Lever Brothers led them to acquire the Niger Company. In the first period of colonial exploitation this Niger Company had been granted a Charter by Britain entitling it to have dominion over the then British West African territories. Therefore, when Lever Brothers bought the Niger Company, they inherited a commercial organisation which had established a predominant economic position and acquired a certain political attitude of mind because it had been, during the first fourteen years of its existence, the actual ruler of a large part of West Africa. Such was our first experience of what developments are possible from a well-run soap industry. Subsequent amalgamations with other trading concerns in the end resulted in the creation of one of Lever Brothers’ most important subsidiaries, the United Africa Company. The activities of this Company had an important influence both on the economic and the political conditions in Ghana under colonial rule. Like all European trading companies, the United Africa Company began with the belief that profit could only be made from a Colony by exporting raw material from the territory and importing manufactured goods into it. Their investments were therefore used to create an efficient commercial machine devoted to wholesale and retail trading and to the purchase of cocoa, which had taken the place of the palm oil, which had originally attracted Lever Brothers to Ghana. The trowing capital of the Company was used to provide the shipping and the handling facilities, together with the credit financing necessary to sustain this colonial pattern of import and export trade. Subconsciously, therefore, the United Africa Company became itself a part of that colonial system which condemned Africa to be an exporter of cheap priced cash crops and mineral ores and the importer of expensive manufactured goods. When the people of Ghana began to revolt against colonial conditions, the United Africa Company thus found themselves involved, from the very nature of their business, on the side of the colonialists. The cocoa hold-up of 1937 and the boycott of imported goods of 1948 are two examples of how this involvement with colonialism adversely affected the business prospects of those expatriate firms which, up till then, had accepted without question, the theory that the only possible pattern of trade and investment was the colonial one.

It is a credit to the United Africa Company that it was able to read the writing on the wall.  This Factory which l am opening today is by no means the first industry established in Ghana by Lever Brothers, or its subsidiary, the United Africa Company. As independence approached, the Lever Brothers Group of Companies came to realise that profit was more likely, and investment safer, if they abandoned the old colonial ideas of trade and devoted their capital to productive industry.

I Ladies and Gentlemen, if l comment on this change today, it is because soap is so symbolic. It was with soap that it all began. Now the wheel has turned the full circle and Lever Brothers, who originally came to Ghana for the raw material, are today manufacturing here the finished product.

This particular example of productive investment underlines the change which independence has brought. It also illustrates, unfortunately, how the advantages of independence are limited by the, absence of African Unity. The fact that this Factory is not three or four times its present size is not because Lever Brothers could not afford to build a larger Factory. It is because our disunity means that there is an insufficiently large market for its products. Many African States still impose customs duties and import restrictions originally designed to limit the trade of the colony in the interest of the manufacturing industries of the Imperial power. The political links may have been broken, but too often on the African Continent we are still, bound by the chains of a colonial economic system. In colonial days, the Imperial powers had no interest in developing trade between each other’s colonies and therefore our communication system — our roads and our railways lead outwards to our ports and thence to Europe, instead of inwards and spanning our Continent. It is not only our system of tariffs that prevents us trading with one another; it is also the absence of lines of communication along which trade can flow.

In consequence, if we have factories at all, we can only have small ones; and the price of our manufactured goods is far higher, than it need be if there was a larger market. Not only do we suffer from this: the foreign investor suffers equally. He is denied the profit which can only be made from large-scale industry and, however willing he may be to invest, his investment is limited by the smallness of the market.

Ladies and Gentlemen, I should like to say this to the expatriate business community. Your vested interest in African unity is as great as that of any African today.

It is, however, necessary to understand what is meant by African Unity. It would be of no value to the foreign investor, if we merely constructed intercontinental roads and railways and abolished customs duties between African States unless we at the same time established overall economic planning. Otherwise, each African State would soon find itself engaged in a cut-throat competition with its neighbour. Obviously, the only sensible plan is to decide which state shall concentrate upon which industry, and upon which industrial products, uniform revenue taxes shall be imposed. These decisions can only be made by an all African political Government that is to say, a Union Government of Africa which has overall powers of economic planning and taxation. Indeed, by every day that we delay our unity, we are making ourselves poorer, and the profits of the investor diminishing. By setting up small industrial units in each State, each producing the same product, we are establishing an entirely uneconomic pattern of industrialisation which, in fact, is unlikely ever to enable us completely to escape from a colonial economic position. The longer we delay African unity, the more difficult it will be to rationalise our industrial pattern, when we achieve it. The foreign investor, therefore, has an equal interest with African consumer in the speediest possible attainment of African unity.

The foreign investor has a further interest in common with the people of Africa. His profit is directly proportional to their prosperity. However large the market area, no product can be sold unless the people of that area are wealthy enough to buy it. If the economy of any African State gets out of hand, if, for example there is a balance of payments crisis, then not only will the investor be unable to export his earnings, but the market on which he depend for the sale of his product will be endangered.

Ladies and Gentlemen, whatever systems may be possible in other parts of the world, the situation on the African Continent is such that I believe the economy can only be kept in balance and economic progress assured by a socialist planning and policy.

The economy of all-African States is at the mercy of changes in the terms of trade. Experience has shown that in Ghana, we can increase the volume of our exports and decrease the volume of our imports and yet, owing to a change in the terms of trade, our exports are worth less and imports cost more than they did before. It is only by a State monopoly of the export of cocoa and of other cash crops that we can hope to control this tendency by which exports from less developed countries tend always to fall in value. An uncontrolled right to import would soon exhaust our reserves of foreign currency and if we are to restrict imports, we must do it in accordance with an overall plan which encourages productive development and which prevents the necessarily limited quantity of imports being wasted on unproductive use.

The traditional economic organisation of African society severely limits the capital any individual can amass. Under our conditions, if capital is to be supplied, it must be supplied by the State from the produce of public saving. This does not of course mean that there is no place for private investment in the Ghanaian system. On the contrary, we regard private investment originating from both outside and inside the country as an important factor in our development. It does mean, however, that private investment should be channelled into those industries which will fit our plans for development.

The history of colonial Africa is a lesson we must all take to heart. It is an experience worth always remembering. When external capital is merely applied for the purpose of obtaining a quick profit, it more often impoverishes rather than enriches the country in which it is invested. For example, the extraction and exportation of mineral ores through the use of imported machinery and by the employment of low paid labour is of no material benefit to the people of the country concerned. Ultimately, the mineral resources of the colonial country are exhausted and the imported machinery is moved elsewhere, or scrapped. The labour that was employed, having been paid only a subsistence wage, will have accumulated no savings. Thus nothing remains upon which future development can be based. This was one of the commonest types of capital investment in colonial Africa and it is still to be found, unfortunately, in some independent African States. It is a type of investment we are not prepared to tolerate and this was one of the reasons for the enactment of the Capital Investments Act.

This Act, which would have been unthinkable in colonial times, is in itself a proof of the changed relationship between foreign investors and the Government of Ghana. While it gives substantial advantages to those who invest in Ghana, it also imposes important obligations. Foreign investors must today fit their investment to suit the overall plan for the development of our economy. They must maintain a high level of employment and impart technical skill to the Ghanaians whom they employ, a thing which unhappily by no means always happened in the past. The Act is in no way contrary to our overall plan for the socialist development of the country. Indeed, it is a necessary part of it. In colonial days, productive investment by foreign investors was prevented in many direct and indirect ways and we therefore entered upon independence with a very low level of industrialisation. We have now to use every means in our power to reverse this position, and this Act is one of them.

Some people think the Capital Investment Act is in contradiction with our socialist aims and ideas. This is not true. However, we are realists and therefore we welcome any foreign investor who is prepared to respond to the socialist conditions in an independent Ghana.

It is because this Soap Factory represents a response to these new conditions that l am happy to open it today. It was their interest in soap that first brought Lever Brothers to our shores. I hope their undertaking of its manufacture in our country will increase their interest in investment generally in Ghana. After all, if one compares the weather enjoyed in Ghana with that enjoyed in Britain, there can be no doubt in which country the Lever Brothers’ capital “Port Sunlight” ought to be situated!

I wish once again to congratulate Lever Brothers for establishing this Factory and for the other substantial investments which they have made in productive enterprises in Ghana.

And now Ladies and Gentlemen, l have great pleasure in declaring this factory open.