Let’s address country’s international trade vulnerabilities
Findings of the country’s Trade Vulnerabilities Report 2022 have gravely exposed its excessive dependence on imports, worsening even more, its international trade vulnerabilities in recent times.
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Another striking and problematic phenomenon the report revealed is the dependence on so few commodities and so few countries for exports.
It also shows that we are still very much a Guggisberg Economy because what we even export are largely in their raw state because no value is added.
These developments and more, as captured in the report, have prompted calls for the implementation of urgent measures to reverse the present trade imbalance against the country.
The call comes at a time when uncertainties created by wars and pandemics have heightened, with no immediate end in sight. (See full story on front page)
For many countries, the developments in Russia and Ukraine as well as the disruptions caused by the COVID-19 pandemic, have brought in their wake, lessons, chief of which are pragmatic policy measures to produce in abundance what they have comparative advantage.
The Graphic Business finds it most unfortunate that in spite of the huge impact the global disruptions have caused to our already fragile economy, we are still heavily reliant on exports. What is more grievous as per the report is the fact that we tend to rely on just a few countries for almost all the things we need to keep going.
Another shocking development is the fact that we are very much aware that this heavy reliance on imports has been a matter of grave concern because of its continuous impact on the value of the local currency, the cedi, against the major foreign trading currencies, and inflation, particularly importation of food items.
For instance, the report showed that four commodities (gold bullion, crude petroleum, cocoa beans, cocoa paste) constituted about three-quarters (75.0%) of all exports.
Meanwhile, for imports, on the other hand, a whopping 219 different commodities make up about three-quarters (75.0%) of all of the country’s imports.
Four countries (Switzerland, China, Canada and South Africa) account for over half (50.0%) of all exports, while six countries (China, UK, Netherlands, USA, India, and Switzerland) are the source of about half (50.0%) of all imports.
Again, of the total number of Ghana’s trading partner countries, it emerged that the country imported from 209 countries but exported to just 161 countries.
By way of share of the commodities traded, two commodities, gold and petroleum oils and oils obtained from bituminous minerals and crude constituted a whopping 67 per cent, a development which begs the question as to whether governments over the years are serious about their resolve to fully diversify the country’s export base to reduce the risk of global commodity price shocks and to rake in more foreign exchange from non-traditional exports.
The paper is aware of the many special initiatives of the government, some of which are the Planting for Food and Jobs (PFaJ), One District One Factory and One District One Dam among others.
Great and laudable as these initiatives are, for more than six years, the country is yet to realise the benefits. Surprisingly, more taxpayer funds are being sunk into their implementation without any serious review to first, block the financial loopholes, address the issue of mismanagement and, subsequently review the entire roadmap to make it more pragmatic to change the present paradigm.
The Graphic Business strongly sides with the Government Statistician and other experts who have raised red flags in the report and hope that the revelations will be an eye opener for action.
The excuses are one too many and the earlier we move into action, the better for the economy.
