Former Trade Ministers proffer solutions to trade deficit
Three former Trade Ministers — Dr Kofi Konadu Apraku, Mr Alan Kyerematen and Ms Hanna Tetteh — yesterday gave recommendations that they said could reverse the country’s continued trade deficit.
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The platform on which they offered the suggestions was the second in the series of Breakfast Meetings on Ghana’s economy jointly organised by the Graphic Communications Group Limited (GCGL) and Fidelity Bank Limited.
Submissions made by all the speakers at the Graphic Business–Fidelity Dialogue focused on how to maximise the value of exports to improve Ghana’s trade balance.
It attracted professionals from a host of industries, including finance, trade, housing and manufacturing.
Worsening balance of trade
Taking the podium after the incumbent Minister of Trade and Industry, Mr Haruna Iddrisu, Dr Apraku said a review of Ghana’s trade over the past two years showed that its overall balance of payment had consistently worsened since 2010, from a surplus of US$1.46 billion to a deficit of US$2.33 billion at the end of September 2013.
That, he said, represented “86.5 per cent annual average deterioration in the balance of payment situation”.
“The problems exist because we have not demonstrated the capacity, political will or strength of leadership to solve them,” Dr Apraku stated.
He said as of September 2013, Ghana’s balance of payment situation had worsened by US$1.12 billion from 92.6 per cent in 2012, indicating a continued poor performance of the external sector.
He said over the years, there had been a consistent increase in imports relative to exports, largely on account of Ghanaians’ appetite for imported goods, while exports continued to be dominated by primary and unprocessed commodities which were subject to price changes on the international market.
Proposed solutions
Dr Apraku called for financing of the export, industrial and agricultural sectors and proposed the setting up of a Ghana Export and Investment Bank to promote exports and for businesses to be given access to credit at realistic rates.
For his part, Mr Kyerematen, who said Ghana was gradually becoming a place of ‘no action, talk only’ (NATO), asked that an export-led growth strategy should be made the focus of the national development agenda.
To make that happen, he said new strategic pillars of growth must be identified, which would diversify the export base of agriculture.
He also proposed the development and operation of a structured programme of implementation which would include technology, research and development support and targeted infrastructural development.
Mr Kyerematen further proposed logistics and small-chain infrastructure, export trade financing, high-level export coordination and harmonisation led by the President, among other measures.
Land access
For her part, Ms Tetteh, the Minister of Foreign Affairs and Regional Integration, noted that the unavailability of land impacted greatly on trade.
She, therefore, proposed a conversation with traditional authorities to release land for businesses which needed them to cultivate crops to feed their factories.
Ms Tetteh said the Nestle factory in Ghana produced for 22 countries in West and Central Africa and noted that if it had large tracts of land to cultivate maize, which was one of the main ingredients for one of its products, it would create a lot of jobs in the agricultural sector.
“If we don’t deal with all the parts in order to make manufacturing competitive, we are never going to be able to have the production capacity to export in the volumes that we aim to reach,” she pointed out.
She proposed that rather than create another bank to promote exports, the existing banks must be encouraged to lend to businesses.
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