According to Dr. Nkechi S. Owoo, an economics lecturer at the University of Ghana, a purposeful plan to work with the private sector to restore struggling and abandoned enterprises will give the nation’s recovery from the current economic crisis new vitality.
While the nation spends billions on importing goods that some of these companies could make, domestic producers like Pwalugu Tomato Factory, Komenda Sugar Factory, Tema Oil Refinery, Volta Aluminum Company (VALCO), Akosombo Textiles Limited, and Wenchi Tomato Factory, among others, have either shut down or are struggling to survive.
However, Dr. Owoo, a Senior Lecturer at the Department of Economics, in an attempt to proffer solutions to the current economic crisis characterised by high inflation of 40.4 percent, high cost of living, the rising cost of fuel, and a fast-depreciating cedi, opined that these companies, if revived and retooled, have huge a potential to help restore relative stability.
“These companies can reduce our import bills on sugar, rice and tomato, and serve as raw materials for industries,” she added.
Dr. Owoo said this during the 46th Annual General Meeting of the Ghana National Chamber of Commerce and Industry (GNCCI) in Accra and explained that the government could partner with the private sector to revamp them as part of an import substitution strategy, or under a broader plan to shift from import reliance to local manufacturing.
She spoke on the theme ‘Ghana’s Cyclical Economic Crisis: Time for Bold Policies to Address the Economic Structure’, and said reviving abandoned or struggling domestic manufacturers would offer both short and long-term gains – adding real value to the economy and boosting the recovery process.
It will also help strengthen the domestic currency which has lost over 50 percent of its value against the United States dollar this year by reducing imports, as well as creating quality jobs for young Ghanaian men and women, she said.
While the government has constantly blamed the COVID-19 pandemic and Russia-Ukraine fight for the current economic situation, Dr. Owoo – just like many economists and business associations like the GNCCI – holds the view that the import-reliant structure of the economy makes it very susceptible to external shocks.
For the President of the GNCCI, Clement Osei-Amoako, the government should encourage multinationals to keep a certain percentage of their earnings with local banks.
This measure, if properly implemented, would shore up the country’s foreign currency reserve and further strengthen the domestic currency, he noted.
“It is high time, as a country, we lived within our means. The acceptance of a fiscal deficit in the nation’s finances is unacceptable, and has been the reason for the government competing with the private sector for capital with a high-interest rate,” he said.
Mr. Osei-Amoako further lamented that a high-interest rate remains a major obstacle to the growth of the private sector, hence, it should be tackled with all seriousness.