Importation is not a Demon to the Economy of Ghana but the Goods Imported - Haruna Yakubu

The world indeed has become a global village where no nation can survive in isolation without the interdependence of other nations close to its boundaries or far away its shores. According to the UN population statistics in 2011, world population was projected to reach 7.6 billion in 2018. However, many population experts believe this figure could be underestimated. As the population grows, many goods and services in the form of material resources or human resources are needed to keep the world in survival. Geographically, countries are endowed with specific resources by nature and man creation. Land, Labour and Capital are the main factors considered in any production systems of developed and developing countries. These factors however, are very limited and therefore proper combination of these factors is needed for developing a powerful economy.

Nations that are limited in some factors especially the mobile factors such as raw materials, industrial products and well trained labour, tend to focus on purchasing these factors from other nations to boost the economy in order to sustain survival of its people. This leads us to the concept of importation of goods and services and economy of scale. With the concept of economy of scales, nations produce best what their resources can produce and therefore may lead to specialization of production in some aspects of the world production. However, where these goods are exported to or imported from depends largely on bilateral relations of the country, distance, specialization and the strength of the economy normally measured by the Gross Domestic Product ( GDP) as explained in the gravity model of international trade.

The above introduction is very clear that importation is not evil in concept but what is imported is the problem. From the Ministry of Fisheries report of 2017, Ghana consumes over 950,000 metric tons of fish annually, currently imports over 60 percent of its fish. Ghana in 2016 imported $135 million worth of fish because of the reduction in the country’s fish stock. Again, the Ghana Poultry Annual Report of 2017 estimated that broiler meat is expected to increase by 14,000 tons to 158,000 tons due to insufficient domestic supply and rising demand. U.S. poultry meat exports to Ghana hold over 35 percent market share. Competition from Brazil and the European Union has been increasing; however, U.S. poultry enjoys brand loyalty advantage over its competitors The Economic Observatory Complexity (OEC) report of 2016 revealed that, Ghana exported $10.5B and imported $11B, resulting in a negative trade balance of $508M. In 2016 the GDP of Ghana was $42.7B and its GDP per capita was $4.29k.

The top import origins are China ($4.67B), the United States ($831M), the United Kingdom ($749M), India ($712M) and the Netherlands ($485M). In the just read 2018 budget of the Republic of Ghana, Imports in Ghana increased to 3240.90 USD Million in the third quarter of 2017 from 3027.47 USD Million in the second quarter of 2017. Imports in Ghana averaged 2676.06 USD Million from 2003 until 2017, reaching an all-time high of 4747.16 USD Million against 4118.30 USD Million export in 2017. Most of the basic goods imported to Ghana such as rice, tomatoes, cookies, cosmetic products, snails, chocolate, sugar, cooking oil, table eggs, meat and meat products, shoes, jute bags, soft drinks, toilet papers, tooth brush, paints, roofing and building materials, used clothes and other items that can potentially be produced in Ghana.

These were done in the early days of our liberation from colonial rule and early post-independence, where we once had a tomato factory at Pwalugu, Jute factory in Kumasi, Sugar factory in Komenda, Fish processing and Roofing nail factory in Tema. If these goods were produced in pre and post early independence, what then stops Ghana from producing same when we are now an oil giant second to Nigeria in West Africa? Can we focus on industrializing Agricultural and adding value to our raw export? Yes, it is possible. The Government's policy of 1 District 1 Factory is a good initiative but should not just be a usual campaign gimmick. However, care must be taken because government has no business in doing business to setting up factories for industrialization.

The discovery of oil was thought to have brought relief to poor Ghanaian just to realize that more than 80% revenue accrued on oil is to the benefit of the expatriate community involve in the mines. Yes! We lack the capacity in terms of Human and Material resources to exploit our own mines but what are we doing as a nation in the coming years? Can’t we train more experts in the oil and gas field to take over? It is possible and some Universities are already thinking and implementing this idea for a prosperous society.    

 

 

      HARUNA GADO YAKUBU BSc Agric, MSc Animal Nutrition (Student) and Research Fellow, ILAPI