The real 'Coconut heads': Economic stability abandoned for cement price control

President Nana Addo in 2017 mentioned that leadership is about choices and that he had no doubt the majority of Ghanaians support the choices he make. Fast forward to 2024, he gave up on the economy when he declared that Ghanaians should wait for the next president to address the economic challenges we faced.

He knew, his choices were certainly bad.

The NPP knows very well that going into the 2024 elections, matters of the macroeconomy will top the headlines. Their performance in the macro economy is nothing they can be proud of. According to the Bank of Ghana, the Cedi started this year against the Dollar at GH¢11.88 but currently goes for GH¢14.67, a depreciation rate of 23 percent. Inflation hits 54.1 percent, the second highest since 2001.

The NPP also declared all tax imposition and tax laws amendments as nuisance taxes and proceeded to declare John Mahama and his appointees as incompetent. They have not also spared President Mahama on public debt levels, GDP growth, living standards including minimum wage and base pay, balance of payment position, ratings by Moody's, Fitch and Standard and Poor, corruption in public life and so on and so forth.

The macroeconomic issues the NPP in opposition based on to declare President Mahama incompetent have become worse with not a single indicator able to stand shoulder to shoulder with John Mahama's record. Instead of focusing on addressing the macroeconomic challenges, the government resorted to blaming all economic players except themselves.

First, it was president Nana Addo who launched an attack on the rating agencies in 2023. At the 30th Afrieximbank annual general meeting in Ghana, the President expressed that Ghana's economic difficulties were "exacerbated by the reckless behaviour of rating agencies that engaged in downgrade shutting Ghana out of the capital market and turning the liquidity crises into solvency crises.” the rating agencies they once applauded in opposition have all of a sudden become reckless in their eyes.

Importers are not also spared in this blame game. The Trade Minister, Hon. K. T. Hammond in November 2023 tried to introduce a constitutional instrument to ban the importation of twenty selected products including cement, fish, fruit juice, rice, and diapers. In an interview on Asempa FM, the minister said, "We won’t ban it completely; we will monitor and ensure proper regulation. We are talking about commercial quantities, and we have set up a committee to check that.”

He went further to add that, "although there is a law, it cannot impose a complete ban unless the situation worsens or reaches a critical stage. Our focus is on monitoring and safeguarding the foreign reserve.” To the minister and for that matter government, by banning imports on products we cannot sufficiently produce to address our local needs will help improve our foreign reserves hence address our currency depreciation woes.

The NPP flagbearer, Dr Bawumia in an engagement with the business community also fired tax officials for harassing businesses. He betrayed the Economic Management Team and Cabinet when he said, "They are harassing businesses. That harassment is coming from the sort of targets that are created at their office.

They are setting unrealistic targets." This attack on the Ghana Revenue Authority officials is disingenuous and born out of his desire to appear good in the eyes of the Ghana Chamber of Commerce and Industry.

Revenue targets are set by the Economic Management Team which the Vice President Chairs and submitted to Cabinet for approval to be included in the budget. How do you then blame the person you set targets for to achieve?

Of late, the issue on the front burner is the cement price control bill. The trade Minister again is trying to use his office to lay a bill before parliament to regulate the prices of cement in Ghana. To him, the producers are taking advantage of consumers by increasing prices to make unreasonable profits. This step has compelled many analysts to question why a capitalist-minded government wants the invisible hand to interfere and show its power in the market.

It is important we discourage the attempt by producers to charge unrealistic prices for their products but it is also equally, if not more, important to tell those who seek to control prices to rather focus their energy on managing and improving the fundamentals of the economy.

An import-driven economy must expect that cement prices must necessarily increase when its currency is doing badly. The Cedi started the year at GH¢11.88 and now trading at GH¢14.67 to the Dollar. This is according to the Bank of Ghana. It is nearly GH¢16.00 at the forex bureaus and interest rates average 35 percent with some banks charging as high as 50 percent.

Producers face with adverse business conditions like these must have to increase prices to break even. We cannot fault cement producers for the price increases but for the inadequate performance of the Nana Addo/Bawumia government.

The government have not for once sat to examine why BIC, Jumia Foods, Glovo, Game, and several other multinationals left Ghana very recently. Never for once, have we witnessed the mass exodus of multinationals from Ghana in the manner we observe in this administration.

Where is the promise of shifting the the focus of economic management from taxation to production? When you lie, you will by all means admit it with your deeds. The government have imposed taxes whose revelance have expired but they are still maintained in the budget. For instance, in the Osei Chei Mensah Bonsu budget in 2021. The "Borla" and COVID-19 taxes were promised to be scrapped in 2024.

Instead of cement price control and blaming all other economic participants, I encourage the government to focus their attention to managing and giving us a robust economy. A robust economy that will considerably bring down inflation, interest rates and tax burden.

These and many more will help restore the economy back on a good footing and investors will once again love to invest and trade and charge realistic prices for us all to enjoy.