General News of Sunday, 9 February 2014
Domestication can end the dollarisation of Ghana’s economy, Leader and Chairman of the Great Consolidated Popular Party (GCPP) Dr Henry Lartey has suggested.
Taking inspiration from his late father’s campaign mantra: ‘Eat what you grow. Grow what you eat, stockpile and export’, Dr Lartey said the long term solution to Ghana’s economic woes lies in producing and exporting more.
‘Ghana imports almost everything. A long-term way of reducing inflation and thus restoring some confidence in our national currency is to produce, produce and produce and export, export and export’, Dr Lartey proposed.
According to him, ‘Ghana can earn dollars, euros, Pound sterling and other currencies (foreign reserves) by producing’.
He said: ‘We have to earn more from our exports especially by value addition such as oranges, pineapples, pawpaw, mangoes including other fruits and vegetables’.
‘Ghana cannot rely on cocoa alone for a lifetime at the expense of other products’, he advised.
‘We should encourage the large production of rice, maize, palm oil, rubber and sugarcane for the production of sugar’, and warned that: ‘If we don't promote domestication to change our current import orientation to export orientation, then the light at the end of the tunnel will continue to elude us’.
He said: ‘We have to pursue economic empowerment for Ghana through domestication,’ adding that: ‘The economy of Ghana should be in the hands of Ghanaians’.
The value of the local currency has fallen drastically against the dollar and other international currencies of trade in the past few weeks.
The situation compelled the Central Bank to announce a series of measures to shore up the cedi against the dollar.
The Bank also injected US$20 million into critical sectors of the economy to cushion the cedi against the dollar.
Dr Lartey in a statement however sees the dollar injection as an unsustainable temporary measure.
‘A short-term solution would have been for the government, if it had enough foreign reserves to intervene in the foreign exchange market to prop up the cedi.
‘But unfortunately, the government may virtually have very little or no reserves to be able to significantly impact on the foreign exchange market. And even if the government has the reserves to intervene, it may be ok for the short term but we need long term solutions’.
He explained that: ‘When the total dollar value of a country's imports exceeds the total dollar value of its exports, the county has a trade deficit. This means the country is exporting fewer goods than it is importing. When a country's trade deficit increases, the value of that country's currency depreciates against the currency of its trading partner countries’.
He noted that: ‘As we have consistently imported more goods over the years than we exported to our trading partners then the cedi depreciates against the dollar and other currencies’.