Licencing imports

the Eurobond market
David Ampofo

The whole thing has been hurriedly and shoddily done. When you have such a huge dependence on imported products, you can only replace them in stages. There are some very basic things that we don’t have the competence to do now, but we can plan our next steps. Take rice. Ghana cannot produce enough rice, which is why we import. We must increase our production capacity and then gradually put restrictions on imports.

Wanting to save scarce foreign exchange and strengthen one’s currency by reducing imports is not altogether a bad thing. Implementing it the way they want to, through an import licencing regime, is the problem. And it smacks of selfinterest, given all we know about many government appointees. They will give themselves all the contracts.

Restricting the import of Offal is something we can live with. But the same cannot be said for sugar. Just imagine the amount of porridge on Ghanaian breakfast tables. It is in such high demand that if you restrict it, the price will go through the roof.

There are some products that we can with relatively short notice put import restrictions on, such as onions. With a sixmonth harvest period, this is something you can confidently start to restrict in six months without upsetting the equilibrium of things. But even here, you have to put in place what it takes to do it right. Have we sorted out our land ownership system? Where are land banks for use in the commercial kind of agriculture that will enable us to produce the amounts needed to make certain imports unnecessary and take measures to restrict their import? Onions are lowhanging fruit, and there are many other lowhanging fruits. In my opinion, the list is poorly thought through. They’ve just looked at the items with high import bills and come up with it.

We know we need to cut imports, but we need to replace imports with those that our pocketbook will allow us to afford. What can we produce in 6 months? What can we produce in 12? There are challenges with local production that we must fix. Our interest rates alone will make our products uncompetitive. Why must imported items be cheaper than the same items produced here? Well, in the case of poultry, we don’t produce enough poultry feed so we import it which translates into more expensive poultry. As a country, are we saying we can’t produce enough poultry feed?

So, let’s focus on what we can do and schedule it in stages, so that we can do away with many unnecessary imports bought with scarce foreign exchange. Let’s think through it properly. Restricting imports can be done, but it must be done in stages. After all, whats being proposed doesn’t really prevent imports. You’ve just introduced permitskilling price competitiveness in the process and creating business monopolies.

Actually, you know what? If we were to eat our stuff more, we wouldn’t be having this debate about the food component of our imports; and we would be eating healthier, fresher products.

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