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Business News of Saturday, 1 February 2020

Source: Laud Business

Different price quotations by port agents causing uncertainties – Prof Quartey

Professor Peter Quartey, an economist, has encouraged policymakers to introduce a harmonized exchange rate especially for operators in the port and maritime industry at fixed time intervals in order to accommodate traders and alleviate the difficulties citizens face as a result the rapid depreciation of the cedi.

He noted that one of the problems affecting the economy and the local currency is the different price quotations by agents at the various ports in the country.

This situation he said has created anxieties and uncertainties among importers.

“At the ports, you’ll have to fix the rate for a month and review it over time. Because currently the agents quote different prices and that brings uncertainty and anxiety within the system.

“Government should set a rate that would require all institutions to apply. There should be benchmark ways of harmonizing this like we have in other countries,” Prof. Peter Quartey, who is also Director of the Institute of Statistical Social and Economic Research, (ISSER), University of Ghana said while speaking on Eye on Port’s live interactive platform as a co-panellist on the topic: Hunting Solutions to the Cedi Depreciation: Role of the Ports and International trade.

For his part, Mr Franklin Cudjoe, President and CEO of Imani Africa, who was also on the same platform corroborated Prof. Quartey’s assertion, suggesting a monthly fixed rate of the exchange rate in order to achieve more desirable results.

“The volatility of the cedi is real and the factors that affect it are difficult to control locally.

“But if the fixing could be done and allow a margin that would compensate an anticipated fall within the month, then maybe yes.”

A Deputy Minister of Trade and Industry, Carlos Ahenkorah, who also participated in the panel discussion, decried certain components of shipping charges in the country describing them as unjustifiable. According to him, such huge payments which account for almost 700 million dollars annually are repatriated to foreign countries, therefore, contributing significantly to the fall in the cedi’s value.

“It is important for us to note that a large chunk of forex leave our shores in the name of freight. I have fought this fight for the past 20-25 years trying to explain to government that we are losing money in a certain way which is affecting us as far as our forex is concerned. It might interest you to know that on an average, every year close to 500 Million dollars is collected in this department alone. Aside that, they charge about 143 Million dollars a year in demurrage on goods in the country,” he revealed.

He urged government to fight the continuation of these charges as it is a sure way to help salvage the loss of the cedi’s value.

“As I speak to you, I have a report and I’m going to present it to the committee. We have to take this up. Let’s tackle the exit points of the country and see how it can help us. I want the bank of Ghana to go back 10years, and see how much money has been transferred out of our shores in the name of freight and they would realise how much this is affecting the cedi depreciating. It is important to assess whether this is real freight or some profit of some sort which somebody is repatriating as freight,” he charged.

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