Stakeholders disagree with the policy on forex withdrawal 

Some trade stakeholders have expressed disagreement with the Bank of Ghana’s (BoG) policy to withdraw forex support for the importation of selected products classified as non-critical goods. 

The BOG announced its intentions not to provide forex support to importation of rice, vegetable oil, toothpick, pasta, fruit juice, bottled water, ceramics, and tiles. 

Reacting to the policy, at a forum, the stakeholders said the policy lacks enough stakeholder engagement and an effective contingency plan as it came in a rush in accordance with President Nana Addo Dankwa Akufo Addo’s directive in a recent national address as part of measures to save Ghana’s economy. 

Mr. Appiah Kusi Adomako, the West African Regional Director of Consumer Unity and Trust Society (CUTS) International, said Ghana could not forever import everything it needs as a country, adding, however, that stopping the dependence on imports requires the relevant capacity to produce to meet the local demand and export. 

Mr. Kusi-Adomako added that as it stood now, the country’s total demand did not match its local capacity to produce leading to a deficit. 

He indicated that the withdrawal of forex support could lead to a shortage of food as without forex support, importers would be unable to bring in essential food products, while Ghana was not self-sufficient yet when it comes to feeding all its people. 

He called on the BoG to take into consideration the welfare implications on households as the commodities would be expensive and people do not earn nearly enough, adding that things would get worse when there is scarcity. 

He said while such a policy will bring long-term benefits such as strengthening the cedi, creating jobs, and growing local industries, without an effective strategy in place, the policy could worsen the economic crisis. 

Mr. Kusi-Adomako said the BOG would have to liaise with other key institutions such as the Ministry of Food and Agriculture and the Statistical Service in coming up with such a drastic policy. 

He suggested that with such a move, the approach would be data-driven and all-encompassing to ascertain Ghana’s readiness to implement such a policy, adding that the government must also come up with an effective and timely contingency plan that would make up for the production deficit. 

Mr. Michael Obiri-Agyei, the Executive Director of the EXIM Frozen Foods Association, Ghana, on his part, even though the policy was intended for good, it had not been carefully thought through. 

Mr. Obiri-Agyei reiterated the lack of extensive stakeholders’ consultation to help appreciate the wisdom behind the directive and help them plan, questioning how an importer who has already engaged his suppliers to import frozen food with the intention of relying on BOG forex assistance to pay, prior to the introduction of the policy would survive. 

He revealed that the policy would not solve the problem but would rather open them up to the black market, which could not be controlled adding that others might also decide to import through Togo and smuggle the goods into the system. 

Dr. Joseph Obeng the President of the Ghana Union of Traders Association (GUTA) said the moment BoG announced the directive, they knew it was the beginning of greater challenges for Ghanaians. 

He said people might begin hoarding, leading to a rise in demand and subsequently, pressure would be placed on the imported goods and prices would hike. 

Dr. Obeng stated that Ghanaian traders were open to sourcing goods locally, but only if Ghana could produce at the same capacity, standard quality, and at competitive prices. 

He appealed to the government to take a measured approach in trying to discontinue the importation of the commodities, adding they have always had the opinion that local production should be promoted side by side with importation.