The second Deputy Governor of the Bank of Ghana, Dr. Nashiru Issahaku, has joined the train of advocates and policymakers encouraging consumption of local products in a bid to cut down on import bills and reduce pressure on the country’s currency and foreign exchange reserves.
He said the central bank has noted the country’s heavy reliance on imports as the biggest challenge impeding efforts by both monetary and fiscal policymakers to stabilise the cedi against major trading currencies.
“There is the need to support small-scale industries to address the situation at hand, and stakeholders must take bold decisions to reduce importation of most of the goods that are produced in the country,” he said while speaking at an awards ceremony to climax the third edition of the Northern Ghana Business and Investment Conference in Tamale.
The comments of the one of the topmost officials of the central bank come in the wake of the continued depreciation of the cedi, which has forced the government to lead a campaign to promote made-in Ghana goods.
Since the year began, the cedi has depreciated against the US dollar by about 40 percent, heightening inflationary pressures.
According to the central bank, despite the country’s trade deficit narrowing significantly to US$156.6 million from January to May 2014, compared with a deficit of US$990.8 million in the corresponding period of 2013, the continued reliance on imports, which reached US$6billion for the first five months of the year, is worrying.
Dr. Issahaku blamed the depreciation of the cedi on poor attitude of Ghanaians in patronising locally manufactured goods, which is needed to boost the economy.
He said the continued high importation of goods and services is rather creating jobs and prosperity for other economies, and urged Ghanaians to cut their spending on imported products.
“The central bank’s foreign exchange reserve is overstretched due to high expenditure on imported goods and services, of which many are produced in the country.
“The major challenge now is to arrest inflation to restore the nation’s macroeconomic stability,” he added. Dr. Issahaku noted that the prospects of the economy are good and urged businesses to produce products that meet the needs and standards of the international market.
Source: B&FT
