BoG's withdrawal of FX support is harsh and counterproductive – Chamber of Agribusiness

The Chamber of Agribusiness has described the withdrawal of the forex support for imported rice as harsh and counterproductive.

Chief Executive Officer of the chamber, Anthony Morrison in an interview with Alfred Ocansey on 3 FM Sunrise Morning Show stated that the withdrawal will not solve the fundamental problem with the Ghanaian economy but rather the government should focus on investing in local production to help reduce the cost of production and ensure an increased production to make local producers more competitive.

“It is a harsh policy in the sense that when you put up such a policy, you should first consider your local capacity. As we speak now, we produce only 39% of the rice we consume in Ghana, so if we issue such a policy and end up not having the local supply, it will turn out that you create a shortage,” the CEO stressed

He noted that with such a shortage, the limited local supply will definitely push the price up. The timing of the policy too is considered as another problem especially considering that we are getting into the Christmas season where the demand for rice peaks.

An information from the Central Bank to banks in Ghana after President Akufo-Addo’s address to the nation on the economy stated that: “in accordance with the president’s directive, issued in his recent address to the nation on the Ghanaian economy on Sunday 30 October 2022, the Bank of Ghana will no longer provide FX support for the imports of rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water, ceramic tiles and other non-critical goods.

Mr. Morrison describes that policy as a knee jerk reaction which the Bank of Ghana is using to pose to Ghanaians that it is working. He also opined that the Planting for Food and Jobs (PFJ) is not working because it lacks direction and has no KPIs to measure its impact.

“We have a policy which is the Planting for Food and Jobs which has no target. There was no KPI so at the end of the day you cannot accuse the minister that he has failed in terms of rice importation control. The minister himself cannot boast that out of his policy he has been able to reduce rice importation by 30% or 40%” he said.

The CEO of the Chamber of Agribusiness suggests that there should be a one year plan in which the 2023 budget will allocate substantial funds to the Agriculture Ministry that will target rice production so that by the next 8 months more rice would be locally produced.

“This current budget should allocate funds to the Agric Ministry that will target rice production for the next 8 months. We should have rice on the market for which at the end of the day, the Bank of Ghana can roll out such a policy. Even that one, it is supposed to be gradual” he added.