The Association of Ghana Industries is on the neck of government to implement policies, backed by law, to save the economy from the influx of foreign goods.
Tony Oteng-Gyasi, former president of AGI noted that, because the economy is import driven, Ghana needs a behavioural change by “finding our own way to our development problem”.
Several economists have attributed the import dependency of the Ghanaian economy to the recurrent lost in value of the local currency against the international trading currencies.
The strength of a country’s currency is anchored in “robust productivity, improvement in international trade records and effective formulation and implementation of policies in key sectors that inf
luence demand and supply of foreign currency, ”Prof John Gatsi, Head of Finance Department at UCC has noted.
The supply of foreign currency through diversified exports, friendly remittances regime and inclusive domestic production are examples of the things that strengthen currencies and not borrowing, Prof Gatsi explained in a write up shared on social media.
Mr. Oteng-Gyasi, the Founder and Managing Director of Tropical Cable and Conductor Limited speaking at the second Media General Economic Dialogue Series in Accra, last week, pointed out that policymakers should take interest in all indicators causing the cedi to depreciate. He noted that, whilst certain economies are making it difficult for Ghanaian products to penetrate their markets, same can’t be said of their products imported into the country.
“The structure of the world trade is so bias towards us”, he observed, asking government to put in place the legal framework to ensure that the Ghanaian market is not opened to every product irrespective of where it is coming from.
“The solution is not free money, cheap goods, cheap price, it is income generation that will give jobs to people and to buy products produced here,” he advised.
Mr. Oteng-Gyasi also wants government to allow the cedi to depreciate at the rate of the inflation. If inflation is high and the cedi appreciates, it would be counterproductive because exporters would be affected and possibly kicked out of business, he explained.
He noted that public procurement, through tendering, is a good venue for the government to get value for money as against sole-sourcing.
The former AGI president is also pushing for contractors to be paid in cedis for products purchased locally. The status quo is that the products are priced in cedis, but government pay in dollars to foreign contractors, he noted.
Meanwhile Finance Minister Ken Ofori Atta has disclosed that government will form a bi-partisan committee to probe the continuous depreciation of the cedi.
Addressing Parliament,last week, March 28, Ken Ofori Atta said after the continuous depreciation of the cedi from December last year to March this year, President Akufo-Addo has directed him to find the structural cause of the cedi depreciation.
“The president has directed that I investigate the structural causes for the depreciation of the cedi and to propose measures to address the situation, the government and I will put a bi-partisan committee together to proceed immediately.”
According to Ken Ofori Atta, the cedi’s appreciation against the U.S dollar over the past three days has been due to the successful issuance of the 3 billion Eurobond and the completion of the 7th and 8th IMF reviews which will lead to the exit of Ghana from the programme.
He added that the two events have given investors’ confidence in the Ghanaian economy.
“The cedi has made great strides of recovery on the back of a successful issue of the US3 billion euro-bond and the completion of the 7th and 8th IMF reviews which restored confidence in Ghanaian economy currently the cedi has witnessed substantial gains with the measures we have put in place there is an existing sound macroeconomic fundamentals we anticipate the stability of the cedi going forward, indeed the cedi as appreciated by 5.12% in March 2019 alone as against a depreciation of 2.7% same period last year.”