The depreciation of the cedi has produced a lot of economist. It is akin to the Akan saying that when a tasty soup goes cold every Tom, Dick and Harry rushes to make use of their taste buds. Even introductory economics students are offering their advice pro bono. It is good, but not so good, because most of the solutions on offer are bereft of the effects of human action and reaction. The principles of economics are not very difficult to master so long as you have already mastered some basic intellectual capital. Though, the graphs and mathematical calculations can be daunting, but for ordinary applications the fundamental theories should not cause any ruffle feathers. And I expect that our president with a postgraduate diploma in communication studies can easily make headway with the everyday application of the discipline to manage the national economy more efficiently.
I am boring you with this lengthy preamble, because of one of those statements the President spews out any time he wakes up at the wrong side of his bed. Just over two months ago, in an interview he granted BBC, he said his government is aiming at increasing local rice production, and eventually become a net exporter. Also, somewhere last year, during the height of the power rationing, he made a similar statement that Ghana is going to be a net exporter of electricity, which Dr Charles Wereko-Brobby ridiculed him diplomatically. It appears he has a penchant appetite for such statements that can be likened to a childish dream.
Don't get me wrong I would love to see Ghana become a net exporter of rice, electricity and what have you. The question that needs answering, how is he going to accomplish that? Is he going to offer loans to farmers to plant the crop? Or is he going to streamline the land tenure system, which is currently not fit for purpose. If you are not with me don't rack your brains any further; just look at SADA, GYEEDA, and those that are brewing in the pot waiting to be exposed.
We cannot count on the government to manage anything, and we don't have to encourage it. The only thing they know how to do extremely well, which strangely even an idiot can do an excellent job, is how to waste money and line their pockets. For practical purposes, let's assume that the President is going to put the right structures in place to get his Holy Grail idea of salvaging the cedi implemented efficiently. However, the question that needs answering, is it necessary that we do it? Is it economical? Though, we fall within the global rice growing regions, our land and productive capital is more suited for the cultivation of maize and millet, which has similar caloric content per weight to rice. Currently, the capital investment in the agric industry is not geared towards the massive production of the amount we need. Besides, rice is a water guzzling crop that will need serious irrigation to be able to produce the sort of quantity we consume. Therefore, it's going to be a mammoth operation if we have to do it. Looking at our present economic circumstances is it something that we would like to embark on. And let me repeat again is it economical? Is it worthwhile investing huge capital that will be directed by the government and their appointees?
Sometimes I find it very difficult to get my head around it. For the simple reason that the President without any equivocation recognises the fact that the underlying factor of our predicaments is productivity. However, he moves the goal post when it comes to the solution. I am not sure whether it's ignorance or stubborn adherence to an ossified ideology. United State, for instance, pioneered the development of computers; nevertheless, presently the manufacturing is mainly done in China and other Asiatic countries that can produce them at a cheaper cost. The fact that we can produce rice does not mean that we have to do it. There are certain countries that can produce it at a cheaper cost than we can. All that we have to do is to increase productivity in all the areas we have competitive advantage.
To bring my point home, let us delve into history to refresh our memories. Before Tetteh Quarshie brought the cocoa seed to Ghana, it wasn’t a government policy to make the crop the pre-eminent economic activity in the country. It was out of conglomeration of individuals burning desires to better their lives that propelled the nation to become the leading producer. The pre-independence colonial governments did not embark on massive state farms to ensure that status. The private enterprise, the backbone of the industry, worked perfectly well until government interference dynamited everything. In the 70s, when cocoa production began reducing drastically, and eventually hitting rock bottom in the early 80s, bureaucratic shenanigans were the culprit. Produce buying clerks issued bad cheques with impunity, and even held back cash that has been made available for payments to farmers for their side business. As a result, the expression – once bitten, twice shy became the guiding principle of a lot of cocoa farmers. Some cut down their trees, those who were bold resorted to smuggling to make ends meet and those who did not have alternative carried on, but completely demoralized. Is this the sort of record the government is going to rely on to ensure that Ghana becomes a net exporter of rice? What come to mind are the massive state farms that have been left to rot across the length and breadth of the country.
Currently, a lot of farmers have stopped the drudgery, because it's not worth the effort. Smuggling is on the increase, however, instead of them to find out what the Ivorians are doing right they will accuse those who engage in it as unpatriotic. Patriotism my....... Who are the nation wreckers? Is it the cocoa smuggler or those who increase the number of parliamentary seats when there is no need? Is a government that spend hundreds of millions of Ghana cedis without anything to show for any better than a smuggler who carry a few pounds of cocoa across the border? How would you characterise a government that pulls the plug on a contract that saddles the country with GHc197.5m to a farmer who smuggles a few pounds of cocoa to provide for his family.
The price of cocoa is not doing very well as I write, but instead of them to cut down their cost and pass on the savings to their producers they will rather reduce or maintain the existing unproductive price to the detriment of the national economy. And when the farmers resort to massive smuggling to cushion the effects of their gross mismanagement they will indict them of being nation wreckers.
I will conclude by saying that lack of productivity in the country is due to the incompetence of the government. Yet, they will blame everyone else, but themselves. They will charge to the account of tax evaders and fiddlers among other things. But the question is who are the gate keepers? Now, instead of the President saying that Ghana is going to be a net exporter of rice what he should put out there are the steps to remove all the obstacles that is preventing farmers from cultivating the crop in abundance. There are existing farmers who would like to expand their business, which will increase their personal fortune as well as reducing unemployment, besides increasing national productivity, but they are unable to do it due to lack of capital. We all have different level of abilities and expertise. There are people who can borrow at 100% APR to operate their business and make profit. Others can make it at 50%, and there are people who can only make it at 15%, 10% or a modest 5%. So at the current basic rate of 18% plus a reasonable mark up of 5% all those who can operate at 15% down to 5% have been eliminated. The high interest rate in the economy is stupidly attributed to greed by bankers by a densely ignorant person like Fifi Kwetey. And if a person of his stature believes such twaddle, the loud mouth piece of the cabinet, what sort of advice can he offer his colleagues to reverse their ineffective policies that is driving the high interest rate in the economy
What is stifling productivity in the country is the unbearable high interest rate. And this has been brought about by the sloppy management of the country's structural and fiscal policies. President John Dramani Mahama, you cannot expect any such leap in advancement of the economy when the government is constantly stabbing business in the back. If you are really serious about salvaging the situation what should be done, rather than just talking, is to work assiduously to reduce the interest rate in the economy. It is the only sustainable way to increase productivity and not government meddling in the economy with projects like GYEEDA, SUBAH, SADA and the rest.
Philip Kobina Baidoo Jnr London email@example.com