Covid-19 and the global economic crunch should be a wake up call to strengthen Ghana's economy

From the time of Sir Gordon Guggisberg through independence to date, the Ghanaian economy has remained largely an import-led one. This means that the country imports most of the commodities its citizens use.

This has created a trade deficit or a negative balance of payment for Ghana for many years.

In some dimensions, an import-led economy backed by the importation of assets like working implements, tractors, and machinery meant for the production of goods, cannot be said to be bad. Such is not for direct consumption but is used for further production which leads to growth in the long run.

Governments over the years have relied on various economic programmes in a bid to restructure the economy to be on an even keel.

From a gross domestic product(GDP) of about $3.2billion and per capita income of $490 in 1957, up to $76 billion GDP and per capita income of about $2000 in 2022, the country can be said to have made a lot of significant improvement in economic growth.

From 2017 to 2019, Ghana was one of the fastest growing economies with a growth rate of 7%. In spite of all these feats and the positive economic indicators, the country has been exposed to the covid-19 global pandemic as well as the current economic downtown being experienced around the world.

It should be noted that, growing an economy from $3.2 billion in 1957 to $76 billion in 2022, a period of over 60 years, is quite a good achievement but the current economic crises reflected in the rise of food prices, increase in transport fares, increase in the unemployment rate, reduction in import cover among others, is indicative of the fact that Ghana has weak economic fundamentals. If there were adequate revenue to finance government projects and external debts, there would not be the need to fall on the International Monetary Fund(IMF) and other donors for financial support in times of crisis.

Ghana has the potential to generate adequate revenue and create enough reserves that can support our economy during external shocks. This can happen if the managers of the economy are able to restructure it to shift from consumption to production.

If we focus more on production, there will be the potential to increase exports so as to set the path towards a positive balance of payment.

Our capacity and the zeal to process the majority of agricultural goods is very low, hence, the need for government to make the processing and manufacturing of goods, especially agricultural produce, a top priority on its agenda. For instance, Ghana as the second largest producer of cocoa in the world is able to process less than 25% of its total cocoa production. The rest of the beans are exported raw to other countries. But as raw as it is, the needed revenue will be low since unprocessed commodities generally do not command higher prices.

It is sad to note that, out of the over $130 billion worth of chocolate industry in the world, less than $2 billion come to Ghana, a major cocoa-producing country.

It implies that, if the country develops the right infrastructure to process even 60% of raw cocoa beans here in the country to manufacture chocolate and related products, Ghana can generate about $12 billion from the cocoa sector alone.

This amount is deployed into the economy, can help absorb so many external shocks and stabilise the local currency as well.

The government should provide subsidies and other support for the cultivation and production of crops and vegetables that our arable land can support. This will help reduce their importation and also create more jobs for the local farmers. For instance, it does not make economic sense when we import onions and shallots from other countries while there is the fertile soil in Ghana to grow these crops. If anything at all, Ghana should seek to be a net exporter of such products.

The importation of onion, shallots and related vegetables in 2021 amounted to about $100 million. Rice importation was about $391 million. If the economy is structured to cut down such importations, some money could be saved to support other sectors of it.

For Ghana to be self-sufficient in food production to guard against escalating food prices, grow beyond aid, stablise the local currency against major trading ones, there is the need to focus more on production. We have the right human and competent technical know-how to process the bulk of the goods and raw materials produced in the country.