In alignment with successful global models, the Ghanaian Government aims to boost the consumption of domestically manufactured goods and services by limiting the importation of 22 strategically chosen items.
This strategic move seeks to fortify local industries, enhance the performance of the Cedi, generate employment, and boost domestic revenue, among other favorable economic outcomes.
Championed by the Ministry of Trade, the proposed Import Restriction Bill targets importers of the designated 22 items, including rice, poultry, sugar, fish, fruit juices, ceramic tiles, animal and vegetable oil. Importers would be required to either source these items locally or obtain special permits from the Ministry for importation.
Originally slated for passage before the close of 2023, the bill has faced opposition from the parliamentary minority and influential trade groups. Consequently, the government has temporarily suspended the bill to facilitate broader consultations.
Despite the government’s optimism that extended consultations will lead to a better understanding of this economic policy, some critics argue that the government should revisit the drawing board, adequately plan, and address fundamental issues before reconsidering a law they fear may burden ordinary traders and consumers, fostering corruption.
Two prominent figures expressing reservations are Dr. Joseph Obeng, President of the Ghana Union of Traders Association (GUTA), and Rev. John Awuni, Chairman of the Food and Beverages Association of Ghana (FABAG). In a discussion with Kennedy Mornah on the Eye on Port TV program, they contended that if passed, this legislation could disproportionately impact the grassroots of Ghanaian society, leading to a monopolistic economy marked by corruption, bureaucracy, and scarcity.
“We interact daily with the common man, the mason, the driver, the widow, the orphan – we are fighting for the ordinary Ghanaian who struggles daily to find one meal. If you take the price of local chicken, a 10kg box is 1300 cedis and an imported one is 360 cedis. None is cheap considering the level of income of ordinary Ghanaians. This law doesn’t serve the interest of any Ghanaian, because laws that try to circumvent the natural workings of the invisible hand of the market have never worked in the best interest of the ordinary Ghanaian, it only works in the interest of the modeler of such programs because it leads to a lot of corruption,” he lamented.
Reverend Awuni contends that the average consumer is primarily concerned with the affordability of products rather than their origin while shopping. He believes Ghanaians would readily embrace locally-made products if they are accessible and competitively priced. In light of this, he urges the government to implement measures that reduce the cost of domestic production, enabling locally-sourced goods to compete favorably with imports.
Echoing this sentiment, Dr. Joseph Obeng, President of GUTA, criticizes the proposed legislation as punitive toward traders. He asserts that local industries haven’t demonstrated the capability to meet domestic demand adequately. Implementing such a ban, according to him, would lead to scarcity and subsequent price hikes.
Dr. Obeng references Nigeria’s approach to rice production, noting that before Nigeria restricted imports, they were able to fulfill 85% of their domestic demand. He emphasizes the need for the government to incentivize local production through reduced taxation, subsidies, and a focus on strategic goods where Ghana has a comparative advantage.
Drawing attention to Ghanaian companies relocating production to Nigeria due to high costs, Dr. Obeng emphasizes the importance of creating an environment conducive to local businesses rather than adopting restrictive measures.
“We visited Avnash Industries in Tema which produce edible oil. It is not functioning well because of the cost of production. Ghanaians are opting for oil from their competitors in Togo because of cost-effectiveness, and not quality. Producing here is far more expensive” he added.
Dr. Obeng aims to dispel the misconception that GUTA and its members oppose the growth of local industries. He emphasizes that local traders actively contribute to the success of local businesses by purchasing their products.
However, Dr. Obeng remains resolute that, regardless of the government’s decision on the policy, GUTA members won’t submit to cumbersome permit processes. He asserts that such bureaucratic hurdles hinder traders and disrupt trade facilitation, particularly in an era of trade liberalization.