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Import Restriction the real game changer for macroeconomics stability and 24/7 hours economy

Feature Article Import Restriction the real game changer for macroeconomics stability and 247 hours economy
DEC 1, 2023 LISTEN

Open letter to the youth of Ghana to , IGNORE THE UGLY NOISES against the Import restriction policy of Hon Kobina Tahiru Hammond, the Minister for Trade and Industry and rise to the occasion to give massive support to the game changer policy to bring about massive agricultural production to activate and support industrialization, as the game changer or catalyst for the 24hours economy for wealth creation, for solving the balance of payment problems (through export and reduction of wasteful imports) and for more jobs.

Import Restriction is the game changer to meet the yearn for the creation of the greatest number of jobs in Ghana, it opens a lot of avenues thus helps to bring about innovation/thinking outside the box to help preservation and value addition to meet available and ready Market demands. For instance, in 1943, the late Dr Esther Ocloo who initially as an ‘O’ Level holder was forced to become an Orange Seller in 1943 due to no job for her and found there was good market for orange juice.

With God at her side, Esther through thinking outside the box changed the narrative with the idea of value addition and pioneered the food processing industry in the Gold Coast, she promoted the garment industry especially in the tie and dye industry and pioneered Microfinance, pioneered the Manufacturers Association. She pioneered the Made in Ghana Goods thus pioneered the promotion of eat Ghana, Wear Ghana, Use Ghana (the domestication concept) when she organized the first Agric Show/Agric Exhibition in 1958. She by singular acts created several jobs through local products and advertised local goods which made President Nkrumah to appoint her as the First President of AGI.

Fellow Compatriots Today is National Farmers Day, so let us salute the Farmers. Whilst celebrating our farmers, let us also give a moment or a minute of silence in recognition to the work of three past great persons of Ghana, who championed industrialization in Ghana and made in Ghana goods and thus gave impetus in the Africa Agric sector. These were the late Dr Esther Afua Nkulenu Ocloo as stated above, the late President Nkrumah initiator of import Substitution or Industrialization in Ghana and the late General IK Acheampong with Operation Feed Yourself and Feed Your Industries.

Import Substitution as stated will create jobs to be occasioned in Down Stream and Upstream and the supply chain from the Down Stream (Farms) and associated infrastructures through the side stream/midstream including transportation, activities of electronic warehouses, the Food Commodity Market/ Commodity Exchange Market etc since the Agric Sector will be driven by Upstream Industries with the possibility of Backward Integration or Off Taker Agreements by the Factories to ensure regular and efficient supply of raw materials and services, lastly, jobs in the local and eternal Markets or delivery services to the Consumers.

Import Restriction implies industrialization/Domestication. Thus the right step to change the Goggisburg Economy. The adoption of import limitation, is simply a common sense economies theory by a deliberate, gradual and tactical restriction of imports to encourage the expansion or the stimulation of Agricultural production which is sine qua non (necessary) for massive industrialization hence Agribusiness 24/7 throughout the year.

Import Substitution is a bid for domestication and the creation of available or ready market for Ghanaian goods and services. It will be contingent among others, on availability of Labour, efficient use of resources, the provision of the needed capital and thanks to God, the African Development Bank (the Governor of the Bank, has spoken of his readiness to support Agribusinesses), then the readiness of the newly National Development Bank together with the aged National Investment Bank for import substitution as established in 1963 by President Nkrumah to support his Import Substitution policy. Lastly, we have the Apex Bank/Rural Banks all over the Country working with over 80 established Electronic Warehousing in Ghana to support the farmers and the readiness of an efficient Ghana’s Commodity Exchange.

Not forgetting the very good works of some Corporate Bodies especially members of the Ghana Chamber of Mines as proclaimed this morning during the Farmers Day Celebration of the shining example of Golden Star Wassa Mines Akyempim, a subsidiary of the Chifeng Gold Group of China which provided equipment and other support for large scale farming in her catchment areas. This was proclaimed by the Company’s Vice President Ghana for Operations, namely Mr Sowah Adjetey.

The farmers so supported by Golden Star Wassa Mines, will surely need the knowledge of availability of ready and good market for their products before they can invest both their resources and energy, hence the Company (Wassa Mine) should be ready to buy their products to keep them in business. So, the new Minister of Trade and Industries namely Hon Mr Tahiru Hammond and the Hon Bryan Acheampong, the Minister of Agric with the support of the Minister of Finance/GRA are therefore on the right path with the import restriction policy to motivate the farmers to undertake commercial farming for wealth creation.

Coincidentally, the Jospong Group with the support of Thailand Investors in rice production with the Cape Coast University also providing research work etc could under massive rice and maize production contingent on good market hence the need for this policy. The Government of Japan and South Korean International Cooperation Agency (KOICA) are in the Central Region to help massive production of rice this will be contingent on good market hence the need for this policy. Hon Kwabena Akandoh and other MPs, Farmers, the IDIF in all sectors of the economy and the Despite Group etc intention to enter into the poultry industry their entry into the Agribusiness and their continue operation will be contingent on good market, hence the need for this policy.

The Government of Brazil (thanks to God we have President Lula Da Silva as President of Brazil who) was ready to support Ghana in 2007 to initiate Sugar Production Series through Northern Star Sugar Resources but was shot down by some Northern brothers. It is anticipated that President Lula Da Silva may help or get investment (investors) for this project if contacted.

The Volta River, a Gold Mine, which originates from Burkina Faso and traverse some parts of Ghana and our Political Leaders in the Fourth Republic allowed it to be causing serious flooding causing disaster with death and loss of properties, loss time injury say loss of time in schooling due to the failure to reduce the issues that led to or may lead to over flooding by failure to exploit its potential for multipurpose projects in Hydroelectric power generation to provide cheap power to industries and irrigation dams for farming under irrigation throughout the year, river transportation and fishery. The massive production of tomatoes at the Vea and Tono irrigation projects will be contingent on good market and good price for tomatoes, hence Tahiru’s policy is God send.

Thanks to some Indians who have just provided the new King Hybrid Seeds of maize with high yield potential in the Bring Ahafo Region, hence need for import restriction with the needed support for large Scale commercial farming by the people of the Region and other areas with comparative advantage.

There are some ongoing agribusiness project including the Bui Dam Sugar Production Series Company, the ongoing Dangote Group Joint partnership in Sugar Production Series with the Bono Regional Coordinating Council to exploit the River Volta and available arable land for massive farming in Sugar Plantation.

These two units together with the nonoperational Komenda Sugar Refinery, the planned 100million Dollars Sugar/Ethanol Refinery at Tema by Cargill International and the current over 30 sugar Refineries in Ghana are awaiting for a National Sugar policy (an element of Import Restriction) to do great wonders in Ghana. So addition of sugar to list is a very good idea. We do not need to produce sugar cane in Ghana before we can set up Sugar Refineries to meet the huge demand for sugar and ethanol in Ghana, this is JHS economy. Some countries do not have cocoa but are benefiting more in Cocoa than Ghana.

Import limitation as and when necessary to support local producers should be coupled with Tax exemption on say imported cheap raw sugar and low or zero tax in the production for at least three years and gradual and tactical reduction of imported refined sugar is the only way to see to the non-operational Komenda Sugar Refinery to become operative, hence a game changer in the Agribusiness throughout the year by depending largely on imported cheap raw sugar.

With time, the Sugar Refineries in Ghana including Komenda Sugar Development Company could employ the principle of backward integration and acquire sugar mills with sugar Plantation or off taker agreement with Suppliers anywhere in the World or see to the massive production of Sugarcane with sugar mills within 40 miles radius to ensure good brix content say at Savelegu in the North East Region.

This is so because Savelegu has the same potential to produce the highest yield of sugarcane per hectare in Ghana same as or even better than Sao Paulo in Brazil, the World leading producer of sugar due to the North with abundant sunshine which Sugar Cane as a member of the grass family and a C4 Plant needs and with good management including the application NPK fertilizer, water management from River Volta (a gold mine but due to our stupidity, it has become a national problem due to perennial flood/Akosombu Dam Spillage, there must be something wrong with our Political Leaders).

Thanks to God for the Northern Battle in 2024 by two brothers namely His Excellency Former President Mahama and His Excellency Vice President Mahama since Ghana’s answer for improving the economic fundamentals lies in the Agribusiness sector by massive livestock and poultry production, massive production of Rice, Sugar, Maize, Tomatoes (need for huge Green housing projects for more tomatoes yield with less land). Hon Tahiru Hammond is just preparing the battleground for them.

Thanks to the 1992 Constitution a Constitutional or Legislative Instrument must be laid in Parliament without obstruction and come into force at the expiration of 21 sitting days after, being so laid, unless Parliament before the expiration of the 21 days annul it by a vote of two third members of Parliament that is 183 members, hence Hon Tahiru the show boy, will give Parliament a big blow, a showdown in 2024.

Compatriots, especially the youth of Ghana rise to the occasion to support a very good cause for your situation of jobless, the future of Ghana for generations unborn. So, ignore, expose and shame some of the detractors with some of them mostly agents of foreign suppliers or markets who together with their foreign collaborators like has/is happened in the Mining Sector, have turned Ghana into a dumping warehouse for foreign goods to motivate the host countries to continue with massive productions. We recently heard of expired rice by a Member of Parliament. So there may be too much rice in the system and the wiser way is import substitution to consume the old stock. Note some of the importers do not pay immediate because the items are dumped as part of work and pay.

We should be very grateful to some members of the Ghana Association of Traders etc for supporting the Country with their goods but it is a high time we halt some of them with their nefarious activities who as stated with their foreign collaborators have turned Ghana into a dumping ground for all sort of goods, This should educate some our people who do not understand why the economy of Ghana is suffering more than the economy of some African Countries say Benin because economics requires all things to be equal before making a comparison .

The simple answer why Ghana’s situation in the foreign exchange or economy is very worst is because all things are not equal. For instance, Ghanaian Soldiers made the heads of cows and the intestines of slaughtered cows in the Lebanese’s butchery houses, which used to bury the cow heads etc or these items to become an item of market value at not less than 30 dollars. Also in 1965, the people of Rwanda used to laugh at Ghanaian Soldiers found eating leaves and tubers of cocoyam which they saw as flowers. So, Ghanaians have made Ghana as a refuse dump for animal intestines (dubbed as towel by chop bars) cow legs, pork items, turkey tail even chicken which we have to pay the source of the refuses in dollars . This is not so in some of Countries say Benin.

Last week, I submitted an open letter to the Speaker of Parliament on the urgent need to operationalize only the Sugar Refinery, I repeat only the Sugar Refinery at Komenda by importation of raw sugar to feed the factory whilst putting in place a coherent National Sugar Policy which will include import substitution or import restriction on refined sugar. Let me reemphasized that, I only referred to the Sugar Refinery and not the whole Production Series with three Standalone units namely, the Sugar Plantation, Sugar Mill and the Sugar Mill unit. I still stand that it was wrongly established over there due to political gimmick which President Kofour and President Mills were advised by experts against because it was/is not a viable project.

The establishment of the Sugar Production Series in Komenda was not based on sound agronomic and economic reasons. The old Komenda and the Asustuare Sugar Factories by ample literatures operated greatly through the importation of raw sugar due to no enough feed and the low feed was of low brix solution content and seasonal, so to operate 24hours throughout the year both old factories depended on cheap imported raw sugar under import substitution policy by General Acheampong until the collapsed in 1982. So why the Sugar Refinery was not established at Tema as recommended to President Mills is a big question for those experts who advised the then President of Ghana to cause this financial loss to the State must be called to answer.

Ghana as stated has local sugar Refineries or industries, over 20 of them in Ghana all in Accra near the Tema Port for producing granulated white or brown sugar, with imported raw sugar for very efficient and profitable business and thus succeeded in running 24hours with raw sugar. I still stand with my point that Komenda Sugar Production series was not established based on sound economic grounds due to available data that indicated that the old Komenda Sugar factory, was a political agendum by President Nkrumah when he nationalized an existed Sugar beet factory. It never received sufficient local raw sugar from locally produced sugar cane or sugar beet, so it actually depended or imported raw sugar and survived until it collapsed in 1982

Industrialization is the change from the agrarian and handicraft to one mainly by industry and machines manufacturing, and this is the only way to transform the country. it is based on some factors which include (1). Innovation and modernization of the Agricultural sector with good Agric infrastructures for irrigation, for massive productions, transportation and storage and marketing, by use of new technology or Agric methods and equipment to increase output, (2).Labour population to work and good population together with the Labour force as ready consumers to buy items so produced (3). Capital goods and Economy advancement through financial system to meet needs of the sector and any surge in economy activity. (4). Digitization and Digitalization for good data, linkages to open up market, Good roads and transportation to move workers, suppliers and manufactured goods to consumers and raw materials to industries.

Historical details revealed that Ghana on independence faced rising imports and stagnant exports so Nkrumah saw an Import Substitution Industrialization (ISI) as a strategy to achieve economy independence and economy growth, ironically not necessary to solve balance of payment problem.

Unlike Hon Tahiru Hammond’s Import Restriction policy, President Nkrumah’s import substitution policy had 100 percent protective policy (hence it abolished and not limitation of the items through tariffs and licensing). This made the manufacturing industries to create a change in the taste for the consumption of foreign goods or imports to the production and consumption of homemade or manufacture goods using imported raw inputs/material, this saw success of the ISI Strategy due to the growth of the domestic manufacturing sector coupled with the expansion of existing industries.

Reports have it that President Nkrumah ISI though it was done under pressure hence ill-conceived it caused the growth of the manufacturing sector from 2 percent of GDP in 1957 to 9 percent in 1969. so in 1960, manufacturing output reportedly grew at rate of 13 percent yearly with its contribution in the industrial sector grew from 10 percent in 1960 to 14 percent thus provided overall growth of 8 percent per year in the industrial sector by 1970.

Per year total employment in the manufacturing sector alone increased by nearly 90percent between1962 and 1970 on the backbone of state own large scale enterprises and joint owned companies including Ghacem owned by Government of Ghana and Norcem of Norway with good investment policies dominating the industrial sector. This Saw the development of building material companies like Ghacem, electrical and electronic manufacturing firms in the production of electronic items like Sanyo, Akasonoma and machinery sector to help develop the industrial sector. The contribution of non-Ghanaian private owned enterprise dwindled from 80percent in 1962 to 66 percent in 1967 to 58.2 percent in 1967.

It was Nkrumah belief that every imported item which could have been manufactured locally thus hinders industrial growth. Nkrumah’s aim was therefore to satisfy the basic needs of the population, create jobs, and assimilate and promote technological progress to create more jobs, way to diversify the predominantly agricultural economy, to create employment for the rapid economic dependence large scale manufacturing industries owned and managed by the state.

By 1968, the NLC which overthrew the CPP regime in a Coup in 1966, reported confirmed that the ISI of Nkrumah or the then Ghana’s economy achieved macroeconomic stability for economic growth. The ISI met bottlenecks in 1970 due to a change from socialist or centrally planned control market to a free market based economy by the regime of then Prime Minister Dr Busia in 1969 in favour of the laissez faire capitalism market or the free market economy policy that led to balance of payment problem and the devaluation of Cedis by 90 percent.

Enter General Acheampong in 1972, he denounced the laissez faire capitalism market or free market economy policy of Dr Busia and put in place comprehensive controls on imports and prices, revaluation of the Cedis which saw the Ghana Cedis experiencing over-valuation (from over 20 Cedis to a dollar to 2 Cedis to a dollar ). Later there was Balance of payment problem with restriction of foreign exchange and poor management of the State Enterprises caused the downturn of the import substituting industries to 33 percent by 1979 to 25 percent by 1980 and 21 percent by 1983 due to lack of foreign exchange to import raw material and spare parts to keep the State Companies running hence the woes of old Komenda Sugar Factory by 1982.

According to the World Bank, by 1984 the import substitution was self-restraining with no expansion in Agric and the export sector, so Ghana could not provide adequate foreign exchange for importation of raw material and spare parts for the local import substituting industries which were found inefficient in the use of local raw materials.

So due to some external shocks (including bush fire nationwide in 1983 and poor policies in the industrial sector, by 1983 the country was relying over borrowing from the domestic financial sector which led to increase in money supply with the resultant hyperinflation thus over crowded out private investment. The reason for the confiscation of the 50 Cedis note by the PNDC in 1983. This was the situation that made Ghana to opt for the IMF/World Bank Bailout in 1983.

The IMF/World Bank prescribed Economic Recovery Program (ERP) through the Structural Adjustment Program (SAP) in April 1983 to check the decline in all sectors of the economy so the SAP was to restructure all aspects of the economy, minimization of the exchange control measures, removal of price controls and introduced market determining exchange rate control measures.

The Ghana Investment sector was set up with Ghana investment code with the privatization of State Enterprise. To privatise the State Mining Companies, the Minerals Commission was set in 1986, Mining and Minerals Law 1986 (PNDCL 153) with the associated Galamasey Law or Small Scale Mining Law at Section 77 of PNDCL 153 was enacted. Parliament must take a second look at the Small Scale Mining Law which was/is a Galamasey Law (a decorated donkey is still a donkey). These were part of measures to undo the ISI of Dr Nkrumah.

Tools used in trade restriction include quotas or quantitative import restriction (through foreign exchange rationing and licensing ), domestic price controls by fixing of minimum rate, rents, and interest rates minimum national income, government subsides through soft loans or zero or exemptions tax, tariffs or nontariff barriers (like embargoes, sanctions, levies) as stated the concept of ISI was abandoned in the 1980s with the Structural Adjustment Programs of the IMF/ World Bank due to rise of global market driven by liberalization.

It is possible that if ISI is not well managed it could lead to high inflation and other problems of corruption. Thank God Tahiru is speaking of Import Restriction and he speaks of open door policy and accountable matters including Parliament questioning and legal action in a Court of competent jurisdiction. So let us criticize constructively to fine tune it as a national project for improving the economic fundamentals and a vibrant 24-hour economy to generate wealth and jobs.

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