The Ghana Union of Traders Association (GUTA) is urging the government to give timelines in relation to the Bank of Ghana (BoG) directive to cease forex support for some food items imported into the country.
GUTA President Dr Joseph Obeng said goods which were procured but are yet to arrive in the country before the directive was given should receive the necessary forex support from the apex bank.
This, he said, will prevent harsh shocks to the businesses involved.
Some items that will no longer receive forex support from the BoG include rice, vegetable oil, toothpicks, pasta, fruit juice, bottled water and tiles.
In an interview, Dr Obeng said, “We are appealing to the Bank of Ghana to provide timelines. If we are saying that the directive will apply to new imports, let’s establish it because how will we pay for goods that have already been procured,” he stated on Citi FM.
He further argued that “the same businessmen will be those investing in the other sectors that the government is trying to boost” by withdrawing forex support for certain commodities hence their call for the government to declare timelines to support better planning.
Background
The Bank of Ghana (BoG) announced that it would cease providing foreign exchange support for the importation of some items into the country.
According to the central bank, the move is in accordance with President Nana Addo Dankwa Akufo-Addo’s directive, issued in his address on the Ghanaian economy, made to the nation on Sunday, October 30, 2022.
A message from the apex bank to commercial banks in the country stated that “in accordance with the president’s directive, issued in his recent address to the nation on the Ghanaian economy on Sunday, October 30, 2022, the Bank of Ghana will no longer provide FX support for the imports of rice, poultry, vegetable oils, toothpicks, pasta, fruit juice, bottled water, ceramic tiles and other non-critical goods.
“Please be advised and act accordingly.”
It would be recalled that President Akufo-Addo, in his address, said, “To this end, we will review the standards required for imports into the country, prioritise the imports, as well as review the management of our foreign exchange reserves, in relation to imports of products such as rice, poultry, vegetable oil, toothpicks, pasta, fruit juice, bottled water and ceramic tiles, and others which, with intensified government support and that of the banking sector, can be manufactured and produced in sufficient quantities in Ghana.
“The government will, in May 2023 – that is, six months from now – review the situation. We must, as a matter of urgent national security, reduce our dependence on imported goods, and enhance our self-reliance, as demanded by our overarching goal of creating a Ghana Beyond Aid.
“Much as we believe in free trade, we must work to ensure that the majority of goods in our shops and marketplaces are those we produce and grow here in Ghana. That is why we have to support our farmers and domestic industries, including those created under the One District, One Factory initiative, to help reduce our dependence on imports, and allow us the opportunity to export more and more of our products and guarantee a stable currency that will present a high level of predictability for citizens and the business community.
“Exports, not imports, must be our mantra. Accra, after all, hosts the headquarters of the secretariat of the African Continental Free Trade Area,” the president added.
The cedi has come under intense pressure against major international trading currencies, especially the US dollar.
This move by the Bank of Ghana is expected to help stabilise the local currency against the major currency, especially the dollar.