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Ghana Armed Forces press conference on the setting up of the Defence Industries Holding Company
The Chief Director, Ministry of Defence, The Acting CDS and Service Chiefs, The Chairman of the VAG Council, Our Joint Venture Partners, Mr Bright Blewu, the Secretary of the Ghana, Journalists Association, Members of the Press, Ladies and Gentlemen.Good afternoon once again.

The Hon Minister for Defence has clearly stated the purpose of this press conference. It is however necessary to say that the feedback, comments and criticisms raised by a section of the public following the sod-cutting ceremony and the formal launching of the programme dubbed “CIVIL – MILITARY COLLABORATION FOR SOCIO-ECONOMIC DEVELOPMENT IN GHANA (CIMCSED)” by the Honourable Minister for Defence in Kumasi last Friday are issues the Ghana Armed Forces considered as it rolled out the plan to start the Defence Industries Concept.

This idea had been on the drawing board for some time and it has taken the Ghana Armed Forces about two years of research leading to discussions with management and business consultants as well as negotiations with our collaborators to reach this far. We therefore welcome the considerable interest of the public in this initiative by the Ghana Armed Forces.

Therefore I deem it an honour and duty to be called upon to throw more light on the concept and steps taken by the Ghana Armed Forces to establish the Defence Industrial Holding Company, a limited liability venture, as the engine to drive this concept. I will attempt to put things in the right perspective, especially in respect of the Footwear Factory, which we consider as the flagship project of the DIHOC.

To Brief The Press On The Factors That Led To The Establishment Of The Defence Industries Holding Company By The Ghana Armed Forces And Matters Arising

Ladies and gentlemen, I believe that those who are over five decades of age will recall that the Ghana Armed Forces has been supportive of the Civil Authourity in a number of socio-economic activities since the First Republic.

The construction of bailey bridges and roads by the Field Engineer Regiment (now the 48 & 49 Engineer Regiment), Medical Outreach programmes by staff of the 37 Military Hospital, support for the Ministry of Foreign Affairs for the establishment of communication offices in Ghana’s Foreign Missions abroad by the Signal Corps, and Disaster Relief Operations by various units of the Army, Navy and Air Force, are some of the socio-economic activities the Armed Forces has been engaged in over the years.

All these activities, except the establishment of the foreign communication offices, have been reactive to events taking place in the country. However, to effectively manage human security challenges confronting the country today, it is important that the Ghana Armed Forces become more proactive in some aspects of the national socio-economic environment and remain focused in its desire to contribute towards national development.

This will be in accordance with effective and efficient management of the social, socio-economic and human security needs of the country. This is the prime reason the Ghana Armed Forces is going into business and we are convinced that it is the direction to go as we strive to step up our efforts to support the Government to meet the objectives of the Millennium Development Goals as well as provide a more stable and conducive environment for private business to thrive. Skepticism aside, we think that there is a begging need for this initiative and new direction by the Ghana Armed Forces; if nothing at all to meet our own requirements as a means of shoring up state funding to the Ghana Armed Forces and overcoming challenges in delivery of badly needed support to the military.

Our strategic goal is to create the environment that will enable the Armed Forces through its established defence industry companies, engage in Civil- Military Collaboration for Socio-Economic Development projects in addition to its traditional roles, thereby laying the platform for accelerated industrial development and growth in the country.

The Ministry for Defence has taken positive steps to implement some aspects of the Public Sector Reforms launched by the Government. The projects under DIHOC will certainly create about 12,000 jobs within the first 2 years of commencement of production. The military is associated with high level of discipline, positive attitude to work, upholding best practices in professionalism in work ethics and culture. We believe that given the chance the GAF can infest the citizenry, especially those our noble institution will interact with, at the work place, with its high level of discipline.

It will also inculcate in Ghanaians the spirit of self reliance, dedication and commitment to duty as well as imbibe in the workers the spirit of patriotism and nationalistic feeling. Closer interaction between the military and their civilian counterparts is likely to infest the rest of the populace with its positive attitude to work.

The GAF is committed to create the environment for people to depart from the “business as usual” concept among most employees by encouraging innovation in the work place as well as rewarding local initiatives. Performance based reward system will be instituted in all the factories to be established under DIHOC.

CIMICSED will transform the efforts of the military into tangibles which can be quantified by the populace. We believe these projects will tend to positively impact on the effective and efficient management of threats to socio-economic and human security challenges in the country

The Military High Command in consultation with the Ministry of Defence decided to establish a new department at the General Headquarters known as the Defence Industries Department (DID) last month. This Department will primarily, give strategic direction to a duly registered limited liability company known as the Defence Industrial Holding Company Limited (DIHOC). This new company will be the vehicle that will carry out all the commercial production of selected items of strategic value to the military in particular and the nation in general.

The projects to be undertaken will dove-tail into the established manufacturing industries set up by DIHOC. The various projects to be undertaken will be in line with the CIMICSED Concept. We shall come later to the specific ventures forming part of the DIHOC.

Let me however reiterate that the DIHOC is solely a Ghana Armed Forces initiative and it is to be run by the Ghana Armed Forces. It has no direct relationship to Government. It is a private commercial entity. The company is expected to be the driving force and engine of the CIMICSED concept and we believe that it will additionally provide security of tenure for this intervention by the Ghana Armed Forces.

Ladies and gentlemen, the DIHOC has been formed to separate these socio-economic activities we are engaging in from the core business of the Ghana Armed Forces. It is precisely to answer this need that the Defence industries Department (DID) has been established to provide that framework for the Ghana Armed Forces. In order to direct this effort appropriately, correctly and more effectively, DIHOC is expected to serve primarily the needs of the military. Secondly, the company is expected to produce enough to meet the needs of local market. Ultimately, we will venture into the external market, starting from the sub-region.

As a start-up company and to meet the legal requirements for setting up a limited liability company, the first Board of Directors are the Defence Minister, in his capacity as chairman of the Board, the Chief of the Defence Staff and the three Service Chiefs with the Director Legal Services of the Ghana Armed Forces as Secretary. These appointment holders are not representing their individual persons but their official appointment. Their responsibilities shall naturally devolve to their successors. It is expected that, as the company gains firm footing this arrangement will assume a more permanent status where the Board of Directors shall either be retired Service personnel or civilians.

At this juncture I will want emphasis that the role of the DID is mainly to provide that linkage with the Ghana Armed Forces. Therefore the Military High Command will not be involved in the day-to-day running of the company. The DID will therefore be the Ghana Armed Forces institution that will provide the policy direction, guidance and coordination that are required to ensure that DIHOC remains focused in its activities and mission. In the DID, the only military person shall therefore be the Director General, in the person of Brigadier General Nii Armah Tagoe and a skeletal staff of serving and retired Service personnel as well as civilian employees.

It should therefore be stressed that the relationship between the Ghana Armed Forces and DIHOC is therefore one of policy direction, strategic guidance and coordination.

Ladies and gentlemen, having said that, we wish to state unreservedly that, the establishment of this company conforms with all the necessary legal requirements.

First, I wish to let you know that the programme has been duly approved by the Armed Forces Council. All legal issues relating to company formation and operation have been addressed. Therefore the Ghana Armed Forces has the mandate to pursue this new initiative.

Additionally, this endeavour conforms to provisions of the 1992 Constitution. Chapter 7 Section 210 (3) of the 1992 Constitution lends credence to the proposition for the Ghana Armed Forces to engage in developmental projects in the country, thus “THE GHANA ARMED FORCES SHALL BE EQUIPED AND MAINTAINED TO PERFORM THEIR ROLE FOR THE DEFENCE OF GHANA AS WELL AS SUCH OTHER FUNCTIONS FOR THE DEVELOPMENT OF GHANA (our emphasis) AS THE PRESIDENT MAY DETERMINE”

The holding company, DIHOC, has therefore been formed not only to separate its activities from the core business of the Armed Forces, but also to give the manufacturing entities to be established the legal status and latitude to operate effectively within the corporate environment. The company’s Logo is the adinkra symbol – “PEMPAMSIE”, meaning “Readiness, Steadfastness and Hardiness”. The logo fits various principles that underpins military operations.

In countries such as the United States, the United Kingdom, Germany, Norway, Finland, Greece, Slovakia, Argentina, Canada, Brazil, Bulgaria, China, India, Pakistan, Turkey, Egypt and Israel, the Armed Forces through activities of their Research and Development Directorates, have built factories to produce identifiable items of strategic interest in the country. The Defence Industries of these countries manufacture virtually all the logistics needed for their Armed Forces and they export the excess.

We have fuelled the economy of other countries for far too long. We must believe in ourselves and strive to become self reliant. The journey to attain such a status has just begun. We urge all and sundry to join hands with us to move our dear country forward. We must transform the country from being the net exporter of primary products and importer of all that we need including tooth picks to an industrial nation that will add value to its primary products before exporting. We must take our destiny as a nation into our hands. Nobody will do this for us. We must believe in ourselves. We are more than capable

It will interest you to know that in the US alone, there are about 101 Defence Industries registered with the Department of Defence. Furthermore, I wish to put on record that most management principles are derived from the military. The Ghana Armed Forces is thus committed to emulating the examples from both the developed and developing countries in running the defence industries. Ghana must strive to move away from being a net importer of food and virtually all goods the nation needs.

We have the human resource base to achieve such a vision. Above all, the nation is endowed with abundant natural resources and our land is fertile. It can support the production of all vegetables, grains and other food crops. Why then should we continue to import the basic grains and vegetables we eat. We even import onions and other vegetables from countries where the desert has covered part of their land space.

Ladies and Gentlemen of the Press, invited guests, ladies and gentlemen, it is time for sober reflection. We must pledge to move our country forward.

The Armed Forces today is appealing to all and sundry to join in our cry for industrialisation of our beloved country. Let us come together to re-build our dear Nation. Together we can re-build our dear country. Together we can move this nation forward. God has blessed us with lots of natural resources. What we require is attitudinal change towards work.

We need complete transformation in our work ethics. There must be renewal of our minds and strive towards efficient and effective production practices. We must put that era behind us. The Colonial Masters left our shores decades ago. We must remind ourselves that on 6 March 1957, we resolved to take our destiny into our own hands. What has happened since then. All is history now. We must put the past behind us and together with the Apostle Paul we must say, ....”One thing we will do, is to forget those things which are past and strive for those things ahead of us….”. We must strive and press on regardless……. We must resolve to move our dear nation forward. This is all the Armed Forces is requesting from our fellow countrymen today. We believe together we can rebuild this beautiful and great Nation called Ghana.

It is evident that the nation can employ the vast and rich human resources in the Ghana Armed Forces towards accelerated national socio-economic development and growth.

The Ghana Armed Forces of today is not the same as that of yesteryears. There is considerable expertise in the military today. We now have many soldiers who are highly qualified in a variety of professions aside from their military duties.

There are many academics and researchers and I have no doubt in my mind that if we should put our shoulders to the wheel together, our beloved nation shall be transformed within two decades. We must challenge ourselves. We are capable of achieving the MDGs. I must repeat that all we need is renewable of our minds leading to attitudinal change.

As the Hon Minister said in his introductory remarks, there is a lot that we can benefit from this initiative. The Armed Forces can provide the catalyst for transforming work ethics in our industries and offices and additionally provide a conduit for the employment of the large army of unemployed youth in the country. At the same time it will provide an avenue for employing retired Service personnel who may have the experience and expertise in any of the industries we are establishing.

It is estimated that four of the ventures can employ up to about 12,000 workers over time. In the next three to five years, this figure will rise and this we believe will serve our nation better.

The strategic goal of the DIHOC is therefore to create the environment that will enable the Ghana Armed Forces to collaborate with the civil sector towards the socio-economic development of our dear country. The DIHOC is therefore to provide critical logistics needs of the Ghana Armed Forces whilst at the same time be vanguard of the nation’s industrialization drive through its research and development.

Our vision is to establish an industrial command that will focus on provision of the critical logistic needs of the Armed Forces, whilst at the same time be at the vanguard of the country’s industrialisation drive and also take the necessary actions that will ensure an effective management of any emerging or prevailing social, socio-economic and human security threats in the country.

The objectives that will maintain our vision in focus include but are not limited to the following:

    Provide most of the logistics needs of the Ghana Armed Forces and other security services in an efficient and cost effective manner.
    Produce items of strategic importance and value to the Ghana Armed Forces and other security services and Ghanaians in general.
    Establish a centre of excellence for consistent and practical research and development in various aspects of human and socio-economic security needs of the country.
    Export goods produced in excess of local needs.
    Create an avenue for employment, not only retired military personnel but all others as well.
    Undertake poverty alleviation programmes in support of the civil authority.
    Identify emerging or existing threats to socio-economic, social and human security and address them appropriately.


Many may be wondering where the Ghana Armed Forces can find the money to fund such a huge project. Funding for all these projects will be raised from private sources. This will include commercial banks, investment banks, venture capitalist sources and from our joint venture partners. The local banks that have shown interest to support the project and pledged to provide bank guarantees in the case of foreign debt capital are UT Bank,

Ghana Commercial Bank, National Investment Bank and Stanbic Bank. Other banks have been approached and have shown interest to support the local initiative by the Ghana Armed Forces. Bank guarantee for the loan from the Czech Republic for our flag ship project, the Footwear Factory in Kumasi, has been provided by UT bank.

DIHOC is also collaborating with other joint venture partners from China, Turkey and Israel. All these will bring on board both funding and technical expertise.

The Ghana Armed Forces has identified priority areas of strategic importance for Ghana to include the following: national energy requirements, agriculture and agro-processing, ICT support for educational and corporate institutions as well as support in the establishment of Community ICT learning centres. In addition, support in construction and civil works, medical outreach

programmes, production of essential pharmaceutical drugs, as well as production of basic military hardware, clothing and other military gear for the security sector have been identified as strategic national needs.

Under the DIHOC, ten industries which we expect will greatly impact on the country’s socio-economic development and growth have been selected for consideration. These are the garment industry, footwear industry, pharmaceutical industry, agriculture and agro-processing industry, electrical and electronic engineering (with an initial interest in computer assembling plant, solar energy industry and mining of silica for the ICT industry), mechanical engineering, civil engineering, ship building industry, printing and publishing industry as well as ammunition and explosive ordinance devices industry.

We shall not engage all these ventures at the same time. Priority has however been given to footwear, garments, computer assembling, solar and renewable energy, pharmaceuticals and civil engineering projects.

As you are aware, the sod was cut last Friday for the revival of the Footwear Factory in Kumasi. And as our flagship project I deem it important to concentrate on that venture as some incorrect information is being peddled in the public domain about this venture.

Dr Karl Laryea here is the local representative of our core partner in this venture, Knight AS of Czech Republic.

When the tender for the divestiture of the Kumasi Shoe Factory was published in 2009, both the Ghana Armed Forces and Knight AS availed themselves of the opportunity. Thankfully GAF won the bid but we thought it prudent to engage Knight AS as a joint venture partner in running the project because only the two of us put in a bid. Knight AS is therefore coming on board with funding and equipment support. The share equity in the venture is 60-40 per cent with GAF having the minority shares. Knight AS has provided five million euros, and not fifty million dollars as published by a section of the press this week, towards funding of the project. The amount is to be used to fund the purchase of goods and services including the supply of the first 6 month of raw materials. The first Chief Executive Officer of the factory is Ingr Jan Rylko who is a Czech national. He will provide the needed technical and managerial direction for two years. After this period a Ghanaian Managing Director is expected to take over. Other appointments to be held by the Czechs are Technical and Production. All the other managerial positions shall be filled by qualified and competent Ghanaians. The work force will be Ghanaians.

I want to emphasis that there is no State funding for these projects. It is principally a private enterprise undertaken by the GAF.
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