Depreciating Cedi: An open advice to the Council of State’s GUTA salvation army

Every month Ghana needs more than 600 million dollars to cover our imports. We have resorted to using debt contracted through loans; external credit supports; bonds which are hardly accessible to Ghana because of our obvious credit ratings and the over flogged cocoa syndicated loans to cushion our voracious dollar demand.

These life support lines which only create room for us to return for resuscitation, at least gives the cedi some temporal respite to tackle Balance of Payment requirements. It almost mirrors the wise saying of a man who intimated that enstooling a frail man to succeed a dead chief only postpones another funeral date.

On the other hand, our 1 district 1 factory project which I maintain was a prophetic move has failed to make any showing in producing those import substitutes to cut down on our imports.

I have always maintained that every dollar spent on an imported product, creates a chain of jobs for workers in another country and deprives a Ghanaian of employment.

It’s a sad exchange that we are watching while the huge containers stream into Ghana and leave empty every day at our ports. Just as you would have to choose not to make calls nor use data if you don’t want your airtime to run out; we might as well choose not to import a thing, if we want the cedi not to depreciate any further. In our case as Ghanaians, that will be a double ‘S’ - Suicide and Starvation.

The Ghana Union of Traders Association (GUTA) expected the Nana Akufo Addo government to do some voodoo in one week to halt the depreciation of the cedi to the dollar which is on the wild upward trod.

A planned closure of shops on Monday 29th August 2022 has been averted by the Council of State which has set up another committee to address the demands of GUTA. It reminds me of the 50-man FX Development Committee inaugurated in January 2020 to investigate the causes of the then-fast depreciating Nkrumah cedi and propound corrective solutions to them.

One run-of-the-mill plea to this committee is to sit with GUTA, foreign retail shops and departmental stores, and other huge importers for a frank discussion to hold us down for at least the next six months.

Do a critical assessment of the huge chunk of imports they bring in. Cluster them into high earn and affordable products; luxuries and necessities. Consider that we are in the last quarter and importers frantically stock up ahead of the Christmas New Year and perhaps valentine's sales. There is no telling whether the perceived copper bullet embedded in the US$750 Afrexim Bank money hoped for and the Cocoa Syndicated Loan will provide the needed buffers to sail us through this last quarter tide.

First point; Explore within the next six months how the luxury brackets can go in for less expensive products which still have demand. For instance, if you are bringing in Sofas costing US$120,000. We don’t have the dollars now for you to buy for that 1 customer whose import will end up plummeting the cedi by a percentage. We will neither want to halt your business. But consider the situation of the country and go in for lesser expensive goods.

Second point: stop the importation of some extremely expensive products within the next six months. Some range of vehicles costing a certain number of hundreds of thousands of dollars; some decorative and aesthetic enhancing products; some flamboyant estate products, etc. can be prohibited at least for the next six months. The hard dollar must be readily available to importers importing what keeps life, body, and soul running.

Third point; in the medium term, begin demanding that persons importing frozen meat; channel some of their funds into setting up farms with business facilitation from the state.

They will begin selling their own locally grown and processed meat. Imagine LaBianca which imports in excess of 200; 40ft of frozen chicken, beef, pork, etc. was persuaded by the state to use the 1.04 million chicken change she paid to the OSP’s asset retrieval account; to set up a poultry farm or broiler processing unit locally. That is where our Broiler Revitalization Program which died a natural death could begin a resurrection service. I will be the first congregant.

Fourth point; the ten billion YOUSTART money that we are still awaiting should not be wholly channeled to a cluster of business plans. Sorry to the youth but enough research points to just a third of such companies ever surviving with a greater number falling out before their 10th anniversaries.

At this point, we should have been seeing some YESPRENEURS and NEIPRENEURS all over the place. The trend does not allow my guts to begin anticipating YOUSTARTPRENEURS employing thousands in the next decade.

As youth, is it the security of having jobs we prioritize or the dashed hopes of becoming CEOs of our own businesses that we covet? Shouldn’t the youth learn the tricks from some regular or semi-regular workspace, to run their own? These are teething questions that need addressing while we support and promote our very industrious Ghanaian youth full of beautiful ideas.

Ask the TOBINCOs, the Kwaku Otengs, the Kessbens, the Champions, the Labiancas, the Kasaprekos, the Premium Foods, the Despites, the Kennedy Agyapong’s, the Kwabena Duffours, the Tonyi Senayas, the Paa Kwesi Nduoms, the Wuntumis and; persons who can read the business channels and tell where the next industry boom will appear from.

These people know where the money can flow from and where the landmines in the extremely complex war field of business are. They all have ideas that need a few of the YOUSTART millions.

They can guarantee thousands of jobs with their expertise, already established channels, and tested management structures. At least let’s split it into two and give half for the experimentation with young business plans and offer half to existing industry players to venture into some local industry work to generate those sustainable lifelong jobs and local substitutes that will save the cedi.

I can only imagine how many of the NaBCo personnel would have been gainfully employed if the 70,000,000 per month salaries expended for three years, were pumped into one or more existing industry players per month with a charge to employ X number of people and to superintend a locally grown industry. Now they are back home unemployed. The structure of our economy remains the same with nothing to show for the promised transformation into a value adding giant.

I don’t for once think the unsustainable quick fixes of let's borrow some dollars to fix the eroding floors will take Ghana anywhere. In anyways, every pesewa gained from a US$750 thousand loan or a US$ 3 billion IMF support contracted at 1 cedi to 10 dollars today will be paid later at perhaps a conservative 1 cedi to 19 dollars when repayment is due.

If we begin to add on the interests in some Effective Loan Repayment calculation, our hands should already be on our heads wailing. In fact, I cringe when I begin to picture the future of this country which unfortunately continues to do the same things over and over but expects different results. Throwing our hands in despair and allowing the cedi to drop to its smoothness level is not also an option. The nightmare of the two ‘S’s will haunt us to our early graves.

The politicians and polipreneurs who will fight local production to continue enjoying the proceeds of their import trade to the detriment of our cedi are unfortunately watching with hawkish eyes. Do you kill them and starve the monocratic monster that rides you to the Jubilee house or Kill them now to save the next generation? Unfortunately I cannot answer that because I am not at the ‘there” where they are.

Another monster in the room is what we always call our Foreign Direct Investments (FDI) which is one of the Key Performance Indices (KPI) of the Ghana Investment Promotion Council (GIPC).

They invest big and hijack the hugely productive and earning sides of the economy. In the end, they become so powerful, that we catch a cold and organize a meeting to find them Efpac if we dare annoy them to sneeze. Telecoms, Banks, huge retailers with foreign names, Global Mining Giants, Bulk Oil Distributors, Shippers, Contractors, Importers, and purchasers of our thriving galamsey gold. They are everywhere and they run the show very comfortably and repatriate earnings very bountifully because the percentages will always be paid to the real Ghanaians.

Before I go for lunch: Let me leave us with this little real-life story.

You will use months to dig; the land, weed, spray imported weedicides and fertilizer, and cultivate a cocoa farm. Harvest and dry. Obroni will come to buy at their own determined world price even though Ghana and Cote D’Ivoire alone produces 60% of the world’s cocoa.

The foreign buyer creates jobs for the shipping lines to send to their country. They throw it into a plant with different production lines and operational nodes.

Just that one day, different extracts and products come out, no sweat. The packing company gets jobs, the logistics lines are rich, and factory floor hands are employed. The whole African continent where Opanin Kwaku and his people tilled the ground in sweat; makes 2% of the $100 billion revenue from the chocolate industry.

If they choose for one day not to buy our cocoa because their noses feel itchy; our cocoa produced is as good as waste because we don’t eat cocoa. Guess what; these billions made will be priced at a decent markup.

Our GUTA and other retail giants will go buy them with hard dollars to destroy our cedi’s value. Make them richer and make us so so impoverished to go back for loans from their fortunes.

That too we will pay back with interest to make them extra richer. Don't start to imagine how they will bring their own contractors and materials to do the work here if the loans were for construction projects. Now they say even our retail market; they are interested. So I saw a Turkish selling utensils on a motor bike and an indian selling God knows what from the back of their car right within residential areas of Kumasi.

Light to the world! Wake up Africa!