Development Economist and Head of Research at the Danquah Institute, Dr Frank Bannor, has urged policymakers and the general public to prioritize the consumption of locally produced goods to bolster the Ghanaian cedi and improve the country’s economic stability.
Speaking at the ABC News’ Economic Symposium in Kumasi on July 25, 2024, Dr Bannor expressed concern over Ghana’s heavy reliance on imported goods, which he argues undermines local production and adversely affects the local currency.
Dr Bannor highlighted that despite vehicle assembly plants in Ghana, the country remains a significant importer of cars. He noted, “Ghana is the world’s 97th largest importer of cars, spending an estimated US$1.14 billion annually. Despite the existence of local assembly plants like Nissan and Volkswagen, which can assemble thousands of vehicles per year, over 100,000 cars are still imported annually. Approximately 90% of the cars on Ghana’s Ghana’s roads are used imports, putting a strain on the cedi.”
He further criticized the country’s reliance on imported agricultural products, which he believes could be produced locally. “2022 Ghana imported $2.6 billion of agricultural and related products. Major imports include rice, wheat, and poultry. While local rice production has increased, it is still insufficient to meet demand. Ghana imports significant amounts of rice from countries such as Pakistan and Vietnam. The nation must produce around 1 million metric tons of rice locally to achieve self-sufficiency and save about $500 million in annual import costs,” Dr Bannor stated.
Dr Bannor also pointed out that all wheat consumed in Ghana is imported, with the bulk coming from the United States, Canada, and the European Union. He noted the lack of local wheat cultivation and the significant costs associated with its importation.
In the poultry sector, he observed that about 65% of the market is dominated by ”free-range” or ”backyard” production, which has a high chick mortality rate. This situation necessitates importing large quantities of poultry parts to meet local demand.
To address these issues, Dr. Bannor called on the Ministry of Agriculture and the Ministry of Trade and Industry to implement measures that would encourage local production and reduce reliance on imports. He believes that increasing local production and consumption will not only strengthen the cedi but also contribute to the overall economic growth of Ghana.
Dr Bannor’s remarks reflect a growing sentiment among economic experts that enhancing local production capabilities is crucial for financial resilience and currency stability.
