That Ghana is not an island, but part of the international community is a statement of fact. That the American dollar has become stronger in recent months, which is unfortunately weakening the local currencies in the international economy, is also not in dispute. These bare facts notwithstanding, we cannot sit down and fold our arms when the strength of the local currency, the Cedi, against the international currencies, especially the dollar, keeps deteriorating each passing day.
The cost of consumables is going up almost on a daily basis, and the dealers are attributing this to the weak strength of the cedi against the dollar. According to the Bank of Ghana official rate, a dollar is being exchanged for GH¢5.23. The figure, The Chronicle understands, is even higher on the black market.
According to a story we carried yesterday, the bread sellers association is threatening to increase the retail price of the Ghanaian staple food, because the flour producers have also increased their price. According to their spokesperson, Joseph Kwabena Bempeh Jnr, for the past three years, there has not been any increment in the cost of flour, which was sold at GH¢130, but, last year, (2018), the flour producers realised they were incurring losses since the cedi was depreciating against the dollar, hence, they increased the prices.
In 2018, he continued in an interview he granted to The Chronicle, they recorded an erratic upsurge in the price of flour, indicating that the price has now increased from GH¢130 to GH¢155. To him, if consumers refuse to buy bread at a higher price, they (bakers) would not come to their shops to buy flour and other baking ingredients.
“Had we grown our own wheat to produce our flour, we would not have committed huge sums of money into import duties, as we are witnessing. As of last week, US$1 was equivalent to GH¢5.36/40, so government should up its game,” he said.
Apart from the flour sellers and bakers complaints, the spare parts dealers at Abossey Okai in Accra are similarly complaining about the high cost of their products, due to the cedi-dollar disequilibrium.
As we pointed out earlier, the dollar has become stronger because of the sound economic policies being pursued by the US government. But, at the same time, it would be untenable to push all the blame on the stronger dollar without looking at the role we are playing as Ghanaians.
It seems Ghanaians import almost everything – from toothpicks down to food items. Despite the fact that we have the land to produce rice to feed this nation, we are not looking at that, but have rather resorted to massive imports of the product.
Also, because of the aggressive marketing strategy that has been adopted by these importers of rice, many Ghanaians now prefer foreign rice to that which is produced here in Ghana. With the free fall of the cedi against the dollar, one would have expected that these importers would divert their resources into local production, and adopt the same strategy to market the produce, but that has never crossed their minds.
All they are interested in is the imports, despite the fact that it is putting severe pressure on the strength of the cedi against the dollar. What has even exacerbated the already precarious situation is the black market dealers in the US dollar. These dealers, who are mostly non-Ghanaians, mop up the little dollars in the system and send them to their home countries.
Regrettably, state institutions tasked to regulate the financial sector have not deemed it fit to clamp down on the activities of these black marketers. There is no way we can stabilise the cedi against the dollar if their activities are not brought to an end. Also, conscious efforts must be made to increase the local production of most of our imported items.
If we resort to local production and reduce the import of rice by 70%, the headache in dealing with the free fall of the cedi would have been dealt with substantially. It is an undeniable fact that if the government fails to deal appropriately with the cedi-dollar posers, the cost of living in Ghana would become unbearable to the ordinary man, and that is why The Chronicle is advising the government to employ all appropriate strategies to deal with the situation before it gets out of control.