Economists have renewed suggestions for the government to reduce the cost of doing business in Ghana to reduce the rising imports and its resultant increase in the cost of living.
They are of the view that Ghanaian manufacturers should be able to produce to meet the demands of locals should their operations be made more competitive.
Speaking on the Citi Breakfast Show on Tuesday, the Senior Research Fellow at the Institute of Fiscal Studies, Dr. Said Boakye said,
“What we should be doing is to encourage domestic production; domestic production at times could be costly due to the high cost of energy which is also unavailable. Even when you want to manufacture, you need to import some form of machinery. All these things make cost of manufacturing in Ghana very high.”
The thoughts and comments come on the back of a recent study by MoveHub has shown that Ghana has the highest cost of living in Africa.
According to the research, Ghana ranked 20th out of 21 countries that were surveyed.
The country’s performance was measured in parameters including groceries, rent, restaurants and bills.
Dr. Said Boakye however maintained that the apparent preference for imported goods could be reversed if local production is made less expensive to encourage local consumption.
“As far as you are not competitive in productive terms and you keep on importing, this will be experienced and even when you are trying to produce domestically too it is very difficult.”
“That is why Ghanaians in a sense are relying on imports. It is not that we prefer imports but because cost of domestic manufacturing is very high,” he again stressed.
When asked by host of the Citi Breakfast Show, Bernard Avle, about whether traders were not seeking to make extreme profit hence the high cost of products, Dr. Boakye said such was not the case.
“When it comes to profiteering, I don’t believe in that. The seller is able to do so when the conditions are conducive for that; you can’t just price anything that you want. Perhaps, if profit margins are higher, then it means there is a little competitiveness and there is some form of monopoly power in the system. But that might not be so much apparent, after all, many others are also importing. What is adding considerably to the cost is the cost of duty and transportation,” he stated.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana