Policy To Reduce Over US$10bn Imports Ready

The report of a five-member ad hoc Cabinet committee set up by President Nana Akufo-Addo on the implementation modalities to enhance domestic production in some 20 selected products, on which the country spends more than US$10billion importing yearly, is ready for implementation.

Once confirmed, it is expected the Minister-designate for Trade and Industry, who is currently awaiting parliament’s approval, will urgently roll out a series of initiatives to implement the policy, the President told parliamentarians during his State of the Nation Address on Wednesday.

“Apart from the enhancement of revenue and judicious use of resources, we all agreed that we need to do something about our huge import bill. Last year, I set up a five-member ad hoc Cabinet committee to work on a policy to enhance domestic production and export development.

“The report on implementation modalities to enhance domestic productive capacity in these products has been prepared, and once confirmed the new Minister for Trade and Industry will urgently roll out a series of initiatives to implement the policy,” he said.

Among these target products are rice, fish, poultry, fruit juice, sugar, tomatoes, vegetable oils and oil palm. The list also includes fertiliser, pharmaceuticals, soaps and detergents, insulated wire, ceramic products, corrugated paper and paper-board, cement/clinker, and motor vehicles.

The policy to enhance domestic production and export development is centred on four main strategies: reducing the country’s import bill in the short-medium and long term; enhancing domestic productive capacity in selected products; generating widespread employment opportunities; and diversifying and expanding Ghana’s export capacity to Africa and beyond.

In November last year, Finance Minister Ken Ofori-Atta told parliament that the country’s import bill on fish, rice, iron, steel, aluminum, sugar, poultry, palm oil, pharmaceuticals, toilet rolls, fruit juice, among others, exceeds US$10billion per annum.

The heavy dependence on importation of goods and services, he lamented, puts excessive pressure on the cedi; rendering it weak against major trading currencies.

Mr. Ofori-Atta further noted that Ghana has the capacity to locally produce these products which account for about 45 percent of the country’s imports value annually.

According to the Ghana Revenue Authority’s Integrated Customs Management Systems (ICUMS), in 2021 Ghana’s total import bill was put at US$13.7billion.

Last year, the economy spent over GH₵6.8billion (equivalent to about US$560million at current market rates) to import rice alone.

While total rice consumption stood at 1.4 million metric tonnes in 2022, imports valued at US$560million accounted for 800,000 metric tonnes (mt) of the consumption figure – with domestic production catering for the remaining demand according to data from IDH Sustainable Trade, a foundation headquartered in The Netherlands.

Similarly, according to the Ministry of Food and Agriculture, between 2010 and 2020 the country’s rice imports hit a staggering US$8billion. This, in addition to imports of other food items that can be produced locally has been a major source of concern for stakeholders.

Source: B&FT