27.07.2004 Feature Article

Have We A future As A Nation Of shopkeepers?

By Graphic
Have We A future As A Nation Of shopkeepers?
LISTEN JUL 27, 2004

Everywhere one goes in Accra kiosks blazon their wares, roads are choked with traders, the young worm their way through traffic to sell their chains, and vans scream their goods to disturb our peace. We are a nation of shopkeepers. Perhaps we learnt the trade from the English, described by Napoleon as a nation of shopkeepers. But the British led the industrial revolution. Maybe we are not good pupils. But it is never too late to learn. We have to realise that we cannot develop the economy and be prosperous as a nation of shopkeepers who buy and sell the goods produced by other peoples. Adam Smith in his “Wealth of Nations” mounted a scathing attack on the trading tendency at his time. “To found a great empire for the sole purpose of raising up a people of customers may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers but extremely fit for a nation that is governed by shopkeepers”, he wrote. Even if we were governed by shopkeepers they went away long ago and they had virtues we could have copied. Or, are we still governed by our own shopkeepers? My forebearers who were noted for their trading acumen diversified into manufacturing long ago. They were and are sharp business men and women. Ghanaians are noted for copying and many followed their lead. If these people are not doing well, we have to find the answer not in those who govern us but in our failure to reappraise the circumstances of the times. The time is gone when as a teenager I could order goods from Britain without sending any money. When the goods arrived I would pay cash and collect them. Everyone who was at school then was aware of the system known as Cash on Delivery (COD). We never heard of balance of payments then. Of cause we were making good money through the sale of cocoa, gold and timber and could afford COD orders. All this is elementary as Conan Doyle would tell Dr. Watson. But we seem to forget the elementary fact that in reality, selling follows production. If we sell and we do not produce then we must buy what other people produce. And if we cannot pay them from the little we produce they will stop selling to us even on credit.I am not underrating the intelligence and knowledge of readers. But now and again we should go to first principles to grasp reality. Moreover many of us get so involved with the major themes like macroeconomic stability, inflation, balance of payments, credit worthiness and the like that we lose sight of basic facts and issues. It is trite to say that we must produce and export enough to enable us to import what we need and do not produce. We must remind ourselves of this simple fact as often as necessary.For, when we get involved and exploit the situation to make a living, it is difficult if not impossible, to understand any suggestion that the mode of making our living is injurious to the economy and makes many poor. Indeed, in such circumstances we take umbrage in economic jargon. For example if we are making good money by importing and selling frozen chicken, we instinctively oppose any measure to curb importation of frozen chicken on the good grounds that it is hurting local chicken production.We then call economic jargon to our aid and argue that we are bringing cheap chicken to the doorstep of the poor man and so on. The argument that the poor benefit because they are supplied with cheap foreign chicken cannot stand scrutiny. The poor will not be able to buy any chicken, local or imported, if they have no money. And they have money when they are employed and not when they are unemployed. The ruin of local industry through cheap foreign imports means unemployment. The poor, who are unemployed, will not benefit from cheap foreign imports after they have been starved to death. We do not import the cheap foreign goods with cedis. We import goods with foreign currency which is obtained by producing and exporting goods to foreign countries. Therefore, if all we do is to import foreign goods with the insufficient foreign currency generated by cocoa and other goods and services, we shall soon find that few of us eat juicy imported steak and chicken but that the country has no money to import essential drugs and other necessities.
We would then have what the economists call balance of payment problem. Simply put, we have no foreign exchange to buy essential goods because we do not produce enough to export. We tried to deal with this problem some years back by controlling imports. It did not work because it encouraged corruption and also because it required exceptional knowledge and administrative expertise.In todays global village, it is an article of faith that we should buy and sell freely and the market will see to it that all is well.
If we buy more than we sell over a period we have a balance of payments problem and we go to the International Monetary Fund (IMF) for accommodation.Meanwhile we take certain corrective measures and impose certain conditions on the running of the economy and all will be well in time.
Experience shows that it is not as simple as that. The truth is that realists while they recite the free market creed do not always follow it and the priests are the chief sinners.The articles of the faith demand free trade and no help or subsidies for exports.
The chief priests do not do that if it is against their interest. But members of the congregation like Ghana face excommunication when they do not conform.
To come to specifics, to make the matter clear, the articles of faith do not allow Ghana to place high tariffs on imported chicken in order to support local chicken production. But if we continue in this way for many products,we shall continue to be a nation of shopkeepers who sell foreign goods and go cap in hand to their suppliers when they have no money to buy goods to sell to survive.
There is only one way out. We should study what those who are doing well under the system have done in the past and what they are doing now.We should be diligent in reciting the creed but circumspect in its application.
We should not be ashamed to mount propaganda deprecating importation of goods available in Ghana and praising the production of high quality local goods. Mr. Dan Lartey might have gone too far with his “Domestication” idea. But there is merit in the policy he advocates.
We cannot continue to sell other people's wares in every corner of our streets and expect to eradicate poverty. We should work; we should invent; we should produce and thereby establish a proud nation of confident people ready and capable of making a unique contribution to the tapestry of the global village.

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