Finance professor at the University of Ghana, Godfred Bokpin, criticized the halted import limitations bill, highlighting the necessity for transparent procedures and a coherent policy direction.
During an appearance on JoyNews’ PM Express on Monday, he raised objections to the government’s decision to implement import restrictions without establishing a clear foundation conducive to the growth of Ghana’s industrial sector.
“I didn’t support it [import restrictions bill]. One, it should not be the ministry to select who can and who cannot import, that’s wrong. And then also the communication of the policy is very important. So there has to be a clear policy direction and you actually start from somewhere,” Prof Bokpin said.
“We didn’t start from somewhere and we wanted to start with restricting import. What is the motive? That’s not going to work and that’s why we didn’t support it. It was not just to ban those imports; the ministry will now determine who will qualify to import them,” he noted.
He acknowledged the necessity for government intervention, but expressed reservations about restricting who can import, especially when many of these goods, though produced in Ghana, are not always available in sufficient quantities to meet domestic demand.
In December 2023, the government suspended the Import Restrictions Bill, which aimed to require importers of 22 restricted items, including poultry, rice, sugar, diapers, and animal entrails, to obtain licenses from a committee to be established by the Trade Minister.
The minority in parliament blocked the laying of the L.I. on three occasions because they deemed it not only risky but also in violation of international trade practices.
They also contended that it might grant excessive authority to the Trade Minister and could potentially foster corruption.
Additional parties opposing the bill included the Ghana Union Traders Association, the Food and Beverage Association of Ghana, the Ghana Agricultural Workers Union, the Importers and Exporters Association of Ghana, the Chamber of Automobile Dealers Ghana, the Ghana Institute of Freight Forwarders, and the Ghana National Chamber of Commerce and Industry.
Their raised concerns encompassed potential price hikes, potential formation of supply monopolies, obstruction of goods flow from exporting nations, and exacerbation of smuggling, resulting in loss of official tariff and tax revenue.
These stakeholders also voiced apprehensions regarding the administration of the permitting process and its alignment with Ghana’s trade obligations under the WTO and the African Continental Free Trade Agreement.
However, Professor Bokpin believes that if the government establishes a conducive environment for businesses and factories, it would significantly mitigate the issues the bill aims to address.
He asserted that the Ghanaian financial system is primarily oriented towards imports rather than production, agriculture, or manufacturing.
“When we talk about enabling environment, it’s not just interest rates coming down. We are talking about a level of interest rates at around 8% or below with maturity of more than 15 years. That’s the only thing that can support manufacturing. If you survey the type of lending in our market, it doesn’t support production. It only supports imports.”
“Our financial system is designed in such a way that it favours import rather than production and agriculture. You check the data from the Bank of Ghana, the level of lending to the private sector and look at the disaggregation, what goes to manufacturing, what goes to agriculture and what goes to import and the rest. You see where the direction is.”
He called for greater transparency and a more structured approach, suggesting that the government’s role should be to create an enabling environment rather than dictate specifics of import operations.
“Do things more transparently and then start from somewhere. Look, if you lay the foundation, entrepreneurs are wise enough, importers are wise enough to know where to import from.
“It’s not for the state to determine who should, otherwise we are not in a market-based economy. Of course, some level of state intervention is important, but the baseline is, to create that enabling environment.”