The Secretary-General of the Trades Union Congress (TUC), Dr. Anthony Yaw Baah, in his 2024 May Day address in Accra, this week, made a clarion call on Ghanaians to reduce imports and consume Ghanaian goods.
In his view, reducing our taste for foreign products was a major step towards stabilising the cedi against major international currencies.
The TUC Secretary-General opined that the living standards of Ghanaian workers had adversely been affected, owing to the depreciation of the cedi since 2016 to date, pegging the decline in percentage terms at about 250 percent.
Dr. Baah observed that the current exchange rate of GH¢14 to $1, compared to about GH¢4 to $1 in 2016, meant that workers who earned a monthly salary of GH¢1,000 in 2016 were taking home the equivalent of $250 in 2016, but today the same GH¢1,000 is $71.
We agree with Dr. Yaw Baah that Ghana should reduce its taste for foreign goods. This is because the prices of these imported goods are directly affected by the exchange rate.
This means that any depreciation of the cedi against the major international currencies, such as the US dollar and the UK pound sterling, will adjust the prices of those goods upward.
Importers will then have to spend several cedis to purchase dollars, pounds sterling or the euro to be able to import their goods to Ghana. The effect of that is the hoarding of international currencies, particularly by people in the black market.
We are not saying that Ghana should completely stop imports. This, in our opinion, is not even possible, considering that we are not self-reliant. We anticipate a day in Ghana where most goods produced here find their way onto the international markets in order to strengthen our local currency.
We cry about the several dollars the Oil Marketing Companies require in order to import crude into the country. It was the burden of always looking for scarce dollars for the OMCs that birthed the Gold for Oil policy by the Akufo-Addo government.
There is no denying the fact that some commodities will be imported because we do not have the capacity to produce them here.
But we cannot be convinced about why Ghana should continue to import used clothes, for instance, as COVID-19 opened our eyes to realise that we could produce more items locally.
The ingenuity of the Ghanaian was at play when we produced scrubs, nose masks and other personal protective equipment locally.
With the lesson learned from the geo-politics around the distribution of COVID-19 vaccines by the western world, Ghana and some African countries, including Rwanda, have set out to produce their own malaria and other vaccines.
Our position is that we cannot have our cake and eat it. If we over-rely on foreign goods at the expense of local production, then we must be prepared to always resuscitate our ailing currency forever.
In the late part of 2023, the Minister for Trade and Industry, Kobina Tahir Hammond, sent a government policy to Parliament for approval, to ban the importation of some 20 goods, ostensibly to deal with the rising dollar issue and also boost local production.
The government’s justification was that the country had to put in about $164 million towards the importation of items like rice, fruit juices, fish and cement, though they can be produced locally. The bill has been suspended as the House was not convinced about some provisions in the policy.
Our neighbour, Nigeria, took a bold step to ban the importation of rice and today, majority of the rice consumed in that country is locally produced.
We reiterate that the call by Dr. Yaw Baah is a good one and the government, for instance, should consult broadly on the subject and implement it, not losing sight of the ramifications, which may include the loss of jobs for those importers.
Ghana hosts the Secretariat of the African Continental Free Trade Area (AfCFTA) and must take advantage of this to see which countries on the continent can supply the items we import abroad. This will help in stabilising the currency, because intra-Africa trade will not be as expensive as the alternative.
