Don’t cut forex support at once – GUTA President reacts to Akufo-Addo’s directive
Dr Joseph Obeng, president of the Ghana Union Traders Association (GUTA ) does not have any qualms with the new strategy being adopted by the Bank of Ghana not to give forex support for the importation of food items such as rice, vegetable oil, poultry, toothpick, pasta, ceramic tiles and others into the country.
Reacting to the issue during a discussion on TV3, Dr Obeng said “There comes a time in the life of a nation like Ghana we have to pause and look from within and see what we can produce and depend on our local production. I think this is the time if you look at the problems we are facing with the forex it is not an interesting one at all and now importation is not even interesting. So if we have the opportunity to produce to enhance from within that will enhance the local products that we consume and have some to export. In this regard, we support the government’s action to industrialize”.
“In this era, we have comparative advantage and so in a well-selected area that we know we have the potential to develop and produce and consume locally to save a lot of this forex. The only problem is the directive given now seeks to say those importing these goods are not going to be given this forex as to the timeliness involved it is not communicated to us because you will understand people have purchased this product and now have the liability to redeem their indebtedness to pay to service their debt either locally or internationally so I think this the area I think we should hasten slowly to find a way to let them pay,” he explained.
He added that “having in mind that these are the same people this importer will be migrated into the local production and so you do not need to destroy or by that action what you are saying is they have to depend on the black market to help them service their debt.
Wading into the conversation on how this issue is going to play out in the forex market, an Economist and lecturer at the University of Ghana, Dr Owusu Sarkodie said “government only says that no forex support but did not say they will ban it. Is there potential the black market will kick in if the traders need to service their debt? there is the likelihood that traders will venture into the black market if not I am not sure the black market will flourish. The directive from the presidency is to help address the depreciation of the cedi so if the Bank of Ghana has not put out measures to control the black market then we would have done the economy more harm than good. So the overall objective is to control the depreciation of the cedi. It means BoG must check activities of the black marker to ensure the cedi is stabilized”.