Ghana Is Seriously In Trouble

Folks, I think that the President’s economic advisor, if he has one, should be fired. In my view, this advisor has been ill-advising the President on how the economy could be made better. Just about a year ago, the Atta Mills’s administration decided to increase taxes on imported commodities. I, for one, questioned the economic soundness of this decision. I was utterly convinced that this decision, if implemented, would have a negative effect on the economy. For years, Ghana’s market-economy has been in the hands of retailers, whose commodities are mostly imported. As a result, Ghanaian consumers have familiarized themselves with imported commodities. Of course, to the detriment of made in Ghana commodities. One thing is certain, Ghana’s manufacturers are losing billions of cedis. Simply because; there’s no market for made in Ghana commodities in Ghana. The Ghanaian consumer, sadly, prefers his/her goods imported.

So, in an effort to reverse this trend, Atta Mills has been advised to increase the taxes on imported commodities. In the name of market-protectionism, this move might seem the right move to make. But, is it? Ghana, as you all know, has a laissez-faire market-economy in which price control is non-existent. Usually, in a laissez-faire market-economy, consumer protectionism has to be firmly in place. We all know how greedy certain retailers could get. However, in Ghana, consumer protectionism is non-existent. As a result, the consumer is, more or less, left at the mercy of greedy retailers. Now, the question is; could tax increment on imported commodities have a positive effect on Ghana’s laissez-faire market-economy? Well, the answer to this question is a big no. If anything, this action would inflate consumer’s expenditure. Remember, an increment of taxation on imported commodities wouldn’t necessarily diminish their demand.

Yes, some retailers would start importing less commodities due to the high taxation. After awhile, imported commodities would be less in rotation, but necessarily in demand. As a result, retailers would take advantage of the situation. They would overprice the imported commodities due to their scarcity. In short, retailers would be making more monies than they ever did before. Remember, this is what happens in a market-economy in which demand exceeds supply. In a laissez-faire market-economy, scarcity of commodities in correlation with demand of commodities equals to inflation. Inflation, if it goes unchecked, could devalue a currency. So, in essence, Atta Mills isn’t helping the economy at all with this decision. If anything, this decision would cause retailers to squeeze more monies from the wallets of Ghana’s consumers. Thus, sky-rocketing the overall costs of living eventually.

Market-protectionism, I believe, has its place. However, in the case of Ghana; who is being protected? Certainly, not the consumer. In my opinion, market-protectionism without consumer protectionism, in a laissez-faire market-economy, equals to consumer exploitation. I, for one, wonder if this is Atta Mills’s definition of a better Ghana. Because if it’s, then we are all in trouble.

Welcome 2 the Dawn!

Source: The Emperor