Overreliance on imported raw materials crippling production — AGI

A staggering 90 per cent of raw materials used in the country's manufacturing sector are still sourced from international markets, the President of the Association of Ghana Industries (AGI), Dr Humphrey Kwesi Ayim Darke, has said.

He explained that the overreliance on imported raw materials was crippling local production, driving up deficits, inflation and debt, and undermining the country's macroeconomic stability.

He warned that the country's heavy reliance on imported raw materials would make it vulnerable to disruptions in the global supply chain as witnessed during the COVID-19 pandemic.

“Our level of readiness for global supply chain disruptions is not up to standard in case there is any pandemic.

“This is because today, about 70 per cent of manufacturers in the country import nearly 90 per cent of their raw materials, which suggest that basic raw material in Ghana as an input for production is under average,” the president said at a session during the 76th Annual New Year School and Conference held at the University of Ghana in Accra last Wednesday.

New Year School

Dr Darke was speaking on the sub-theme, “Building Partnerships and Facilitating Cross-Border Trade through Digital Commerce”.

The Annual New Year School and Conference provides the platform to discuss national issues and proffer solutions to them.

The event is organised by the School of Continuing and Distance Education, College of Education of the University of Ghana.

This year’s event is on the theme: “Attaining the 5-Ps of Sustainable Development for a Resilient Ghana: People, Planet, Prosperity, Peace and Partnership”.

Reversing the trend

To reverse the trend, the AGI president stated that there was a need for the government to correct the system by introducing some bold solutions to significantly transform the economy.

He said these solutions must help curb the excessive imports, tame inflation and slow the depreciation of the local currency.

“Guinness Ghana needs a lot of millet and maize to produce their malt but it is a challenge to get these raw materials at a significant quantity and the right quality locally to produce and so today, there is a huge importation of the malt in the market.

“And so, we need a strong hand and some bold decisions from leadership to correct this anomaly,” he added.

PPP arrangement

Dr Darke said private sector businesses should capitalise on Public Private Partnership (PPP) arrangements, which presented a significant investment opportunity.

He said by leveraging PPPs, businesses could collaborate with the government to develop critical infrastructure projects, fostering a mutually beneficial relationship.

“PPP should be a win-win initiative for both parties because it is one of the best ways for the government to scale up and deploy infrastructure speedily and reduce its fiscal expenditure.

“Some of the successful projects under PPP are the Tema Port expansion project (MPS Terminal three), roads and mining concessions, among others,” he said.

Digitalisation

On digitalisation, the president advised businesses to avoid ventures no longer relevant in today’s changing world.

Rather, he said firms must be adaptable and able to pivot to deliver new products and services or to form novel partnerships to strengthen operational capacities.

He said in the rapidly evolving landscape of digital innovation, staying adaptable was not just a strategy — it was a survival skill for every business to take advantage of.

He said integrating digital systems was the best way forward, offering a multifaceted solution that enhanced efficiency, facilitated secure and convenient payment processing, provided innovative marketing opportunities and enabled seamless trading.

He added that with digital systems, businesses could revolutionise their operations, improve customer experiences, increase revenue growth, and gain a competitive edge in an increasingly digital and interconnected global marketplace.