Some things in life belong to the category which someone has described as “the unalterable law of life”. An example is ‘Devaluation”. Another is “Pumping Dollars into the Economy”. No African Minister of Finance wants it, yet every African Finance Minister succumbs to their power. They are called, “Classical Economics”.
Last Tuesday, the Daily Graphic reported that “The Bank of Ghana (BoG) has stepped up its supply of United States (US) dollars to meet daily demands for foreign exchange as global pressures and the exit of investors from emerging markets cause the cedi to depreciate…”
As always, the situation has come about owing to “circumstances beyond control. One of them, they say, was speculative trading “as nervous and opportunistic forex traders deliberately took trading positions against the cedi in the expectation of further depreciation.”
In 2015, the media reported that “The Bank of Ghana (BoG) is to inject hundreds of millions of United States dollars into the economy ….The move, which is intended among other things to save the troubling local currency, will be an addition to the weekly injection of about US$80 million into the economy to save the cedi from further depreciation.”
At that time, under the government of the National Democratic Congress (NDC), I described the phenomenon as “Wampahnomics” on this very page of this very newspaper.
This columnist is not about to do New Patrotic Party (NPP)-NDC equalisation, but reading the Daily Graphic story last Tuesday brought to mind the “urgent” cry of the banking sector at the time (2015). The managing director of one of the local banks said at the time that “commercial banks are currently struggling to meet payment orders from their customers in foreign currencies for transactions the customers made abroad.”
A few hours after reading this week’s story about “Pumping More Dollars”, I saw at one of the malls, a small plastic container-ful of toothpicks. The label was in Chinese lettering! Later in the day, I saw truck-loads of imported goods, including used fridges, used TV sets, cooking utensils and dinner sets.
Sadly, it is for toothpicks and such goods that our banks need dollars so urgently!
Why is this happening to us? Is it the case that our economy is so liberalised that anything at all can be imported without let or hindrance? Are we the only democratic country on earth?
In 2004, the Nigeria's federal government banned the importation of 101 items “in an effort to protect local industries”.
The banned goods included textiles, furniture, fresh fruits, plastic materials, men's footwear, leather bags and goat meat; bicycles,machetes, beef, toothpaste, pencil and vegetable oil. Also banned were printed fabrics, fruit juices in retail packs, table water (spring or sparkling), spaghetti and noodles, second hand tyres, gaming machines, bagged cement, among others.
The then Minister of Information of that country told press that "Nigeria has over the years become a dumping ground for very many cheap, substandard and low quality products from across the world, especially Asia. We cannot allow this to continue."
Are we more democratic than Nigeria? Or, for that matter, the United States? On September 6 this year, the most democratic country in the world announced that it would place “punitive tariffs” on US$50 billion of Chinese imports and “restrict investment” in the American hi-tech industry. Reason? “To protect our national security,” said President Trump.
In placing the ban, the Nigerian minister at the time said “the government is aware of its obligations under the trade treaties it has signed with the World Trade Organisation (WTO) and the Economic Community of West African States (ECOWAS).” In other words, “Nigeria first”.
So why are we acting so helpless?
The answer to our problem is contained in the words of President Akufo-Addo when on October 19, 2017, he announced plans to cut down on food imports.
wish to submit that that is the problem: our unbridled preference for imported goods.
O, I know that economic transformations don’t happen overnight, but I ask myself: How come all attempts by all governments to change the taste of Ghanaians have failed? It has a history and it dates back long ago when colonialism succeeded in changing the taste of the people of the Gold Coast by using the cinema to make us and everything African look inferior in our own eyes.
Films such as Mr English At Home (1940) and An African in London (1941), were produced with the aim to teach British etiquette to Africans and introduce us to western goods.
Films such as Leprosy (1952) were produced to force our preference away from traditional medicines which we were used to, and which, ironically, still serve 60 per cent of our populations.
The Spectator newspaper of the early 1920s had stories that confirm the picture Kobina Sekyi, lawyer and playwright, painted in his play, The Blinkards about the African.
Our minds have been taken over by the ways of the colonial master.
It takes leadership to reverse this and save the cedi. It may not happen overnight. One solution is the ‘Wear and Eat Ghana’ being championed by Tourism Minister, Abelema Afeku.
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It includes getting all schools to have crop and livestock farms plus fish ponds.
Another is where the Ghanaian finds that he/she has nothing apart from Ghanaian goods around. Over-liberalisation is what is choking the cedi.