Following the Presidential address last Sunday, many people have taken to social and traditional media to express their opinions on what the address meant to them. One of the interesting takeaways of the address was the issue of money ‘does not like noise’.
This expression has been taken lightly or very seriously, depending on the interpretation one assigns it. However, this is an age-old expression that has been used by many but coming from the President of the Republic has attracted societal interest. I have seen how much effort people are putting in analysing the President’s speech.
From where I sit, I could see that the President was speaking to different constituents and thus gave a high-level address that was to serve as a guide to specific ministries to provide the detail. Following the address, the players in the market immediately responded and that together with $710m cocoa syndicated funds have partly accounted for the stability of the Ghana Cedi this week.
One such example is the policy that there will be no haircut on individual, cooperate or pension funds. What must be clarified however is the fact that, based on a new policy directive from the Securities and Exchange Commission (SEC/DIR/002/10/2022), a new policy regime has been introduced, which is discouraging disinvestment before maturity.
This means if one should rush into discounting their investments, they stand to lose part of their investment. This policy is not new in investment except that Ghana has for a long time opted for the amortization approach. Therefore, I would have expected by now that, the different Ministries and Agencies would have provided detailed policy directions after the address. This unfortunately, is taking a while to come if it will come at all.
Ghana is in a crisis as alluded to by the President. At the same time, Ghana stands the chance to make great economic gains that can change the future of this nation for good. At present, imports are the most expensive commodities on our shelves. This presents an opportunity to make our locally produced goods cheaper. For example, if you take a locally produced chicken at current prices, it is still cheaper, healthier (devoid of antibiotics), and more nutritious. How will the average Ghanaian know this truth if they are not told? The same can be said of our locally produced rice which is healthier and cheaper. I expect the Ministries of Food and Agriculture, Trade, and Information to be on a deliberate and rigorous campaign by now to tell the good news of why we must all patronize in locally produced goods. Apart from the health and nutritional benefits, this will create jobs and lessen the pressure on the cedi. One of my recommendations in this regard is for shop owners to begin to designate specific spaces in their shops to locally produced goods or provide clear labelling for locally produced goods. This will help consumers to make quicker decisions. Households on their part should begin to consider locally produced substitutes for their daily bread baskets. As we patronize in locally produced goods, the cost of production reduces and that will translate to lower prices.
In a conversation with a businessman, he admitted they have decided to stop importing potato chips because the demand has dropped due to increasing prices. While this is a problem, it presents an opportunity to consider a locally produced substitute. A healthier and cheaper option in my view could be yam chips. For most middle-class families, if they can access yam chips in a form that makes baking or frying comparable to imported chips, I can guarantee the yam will be preferred over anything else. The government on its part should be deliberate at providing credit guarantees to some of these innovative ideas that will help to address the import challenges currently facing the country. Going forward, 1D1F should be relooked at to go into the production of some of these essential domestic and industrial commodities.
The President’s six month notice to importers of specific commodities must not be taken lightly. The Ministry of Food and Agriculture together with the relevant Ministries of Trade, Finance, etc, should work to ensure that adequate local arrangements have been made for the items to be affected by the new import regime. The process should be simulated and evaluated ahead of the implementation of such a policy. If this transition is not done well, this can lead to hyperinflation. One thing that can be done is to engage the importers of affected items to make Ghana their primary source while they possibly change their focus to exporting made in Ghana products instead. This way, they would not have to collapse their already established businesses which might further worsen the plight of individuals involved in that value chain. I also expect that policies will be put in place to regulate how food is exported out of the country through our land boarders. For a start, government can put restrictions on the export of some food items to guarantee adequate local supply.
I encourage the youth to channel their social media attention to thinking through solutions and the opportunities that the current crises have presented them. Universities and training institutions must awaken their creative senses to begin to innovate around what currently exists in the country. Lecturers and supervisors must push students to innovate solutions in their presentations and project works. As we collectively put our hands on deck, we will soon see the good in the bad. In times like this, be careful who you listen to. It can give you hope and energy to do the right thing or will demoralize you and throw you into despair. As for me I choose hope, not despair.
God bless Ghana and make us great and strong
About the author; Dr. Hayford M. Ayerakwa is a Development Economist at the University of Ghana
