Lay the right foundation before restricting imports – Traders tell Gov’t

Following the blueprint of many successful nations, the Government of Ghana looks to shore up the consumption of locally produced goods and services by restricting imports of selected 22 strategic items. This move is also intended to empower local industries, bolster the cedi’s performance, create employment, increase domestic revenue among other positive economic outcomes.

A Trade Ministry-led initiative, the proposed Import Restriction Bill seeks to compel importers of the 22 restricted items, including poultry, rice, sugar, fish, fruit juices, ceramic tiles, animal and vegetable oil, to source locally or obtain special permits from the Ministry when importing.

Government hoped the bill will be passed before the end of 2023, but following spirited resistance from the minority in parliament and disapproval by influential trade groups, government has suspended the bill, to allow for broader consultation.

Despite government’s optimism that deeper consultations will yield better appreciation of this economic policy, some have suggested that government must instead, go back to the drawing board, plan adequately, deal with the fundamentals before revisiting the law they believe will burden the ordinary trader and consumer, while breeding corruption.

Two of such people are the President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng, and the Chairman of the Food and Beverages Association of Ghana (FABAG), Rev. John Awuni who were interacting with Kennedy Mornah on the award-winning Eye on Port TV program.

According to the Chairman of FABAG, the grassroots of the Ghanaian society would have been most hit by this legislative instrument if passed. This is because it will result in a monopolistic economy riddled with corruption, bureaucracy and scarcity.

“We interact daily with the common man, the mason, the driver, the widow, the orphan – we are fighting for the ordinary Ghanaian who struggle daily to find one meal. If you take the price of local chicken, a 10kg box is 1300 cedis and imported one is 360 cedis. None is cheap considering the level of income of ordinary Ghanaians. This law doesn’t serve the interest of any Ghanaian, because laws that try to circumvent the natural workings of the invisible hand of the market has never worked in the best interest of the ordinary Ghanaian, it only works in the interest of the modeller of such programs because it leads to a lot of corruption,” he lamented.

Reverend Awuni argued that ordinary consumers are often not preoccupied with the origin of products when shopping on the market, but instead the affordability of such items, so, Ghanaians, he believes will be readily available to buy Made-In-Ghana if they are made accessible and priced competitively.

He therefore urged government to tailor measures that will reduce cost of domestic production, so locally-sourced goods, will compete favourably with imported ones.

The President of GUTA, Dr. Joseph Obeng echoed this sentiment saying the LI only seeks to punish traders.

To him, local industries have not proven thus far, that they can sufficiently supply for the local demand, and the ban will seriously cause scarcity and consequently, price hikes in commodities.

He said, when government attempted this initiative with poultry, it failed.

Dr. Obeng added that, “we refer to Nigeria often in the case of rice. But before Nigeria took that decision, they were able to take up 85% of the domestic demand.”

He said government must incentivise local production by reducing taxation, provide subsidies, and concentrating on strategic goods Ghana has comparative advantage in.

The GUTA President cited the case of some Ghanaian companies, who flee the high cost of production here, to produce in Nigeria, before coming to sell on the Ghanaian market.

“We visited Avnash Industries in Tema who produce edible oil. It is not functioning well because of cost of production. Ghanaians are opting for oil from their competitors in Togo because of cost-effectiveness, and not quality. Producing here is far more expensive” he added.

He also attempted to correct the erroneous notion that GUTA and affiliated members are against the growth and success of local industries stating that it is local traders who buy out all the locally produced goods.

Dr. Obeng was emphatic however that, whether government decides to see the policy through or not, his members will not subject themselves to bureaucratic permit processes that frustrate traders and impede trade facilitation especially in the era of trade liberalization.

Source:norvanreports