Ghana’s wrong free trade policy killing jobs – Dr Kofi Amoah

• Mar 27, 2023

One of Ghana’s successful businessmen and economists, Dr Kofi Amoah, has once again advised the government to revisit and review its free trade policy as it tries to mop up revenue domestically to finance its development.

According to Kofi Amoah, one of the surest ways for the government to stimulate growth in the local economy is to provide a conducive environment for local production to thrive.

He is, therefore, admonishing that some form of protectionist approach should be deployed to ward off the unfair and incessant influx of foreign products onto the local market.

This he believes would provide the impetus for local manufacturers to thrive, invariably driving up job creation and revenue mobilization.

In a series of tweets on his verified Twitter handle @amoah_citizen, Dr Amoah posited that all developed economies at some stage in their development adopted a protectionist approach to help their infant industries to grow.

“A country’s international trade practices may retard or accelerate her progress Ghana/Africa is poor partly due to the timidity to do what’s right and in their interest instead of what they have been told to do which benefits outsiders more. Successful countries use tariffs and other policy instruments to protect their domestic markets from unhealthy competition.

“Today’s successful countries protected their internal markets for their young, inexperienced companies from outsiders Ghana’s wrong policy of free entry of products from more experienced foreign companies will kill our efforts 4 domestic production and JOBS.”

Dumping

Asked by one of his followers why prices on local producers cannot be reduced to match that of imported products, Dr Amoah pointed to the phenomenon of dumping and reemphasized that it is part of the reasons Ghana must not open its borders to every imported product.

“ There’s something called DUMPING… that’s when a country targets a specific product market in another country to underprice the native producers of that product; due to the foreigners lower pricing (better quality n packaging), consumers prefer to buy their products and eventually kills the domestic producer for lack of patronage. Please note that the lower pricing of the imported product is below the cost of making the product or sells higher in the exporter’s country than in the importing market After killing domestic competition, they raise the price as a monopolist, causing trade injury to the importing country.”

Learning by doing

Dr Amoah also called for patience for domestic producers whose quality may not immediately match up to that of imported products from more advanced economies. He argues that without bold policies Ghana and Africa will always bend to the needs of its colonial masters at the detriment of its citizens.

“ This is why it’s important for Ghana/Africa to protect their nascent producers for some time to make room for a “learning-by-doing” period, which helps to improve product quality, packaging and pricing It’s the reason countries impose high tariffs (taxes) on imports to protect home-made products and create JOBS at home!”

Protect 1D1F policy, infant companies from external predators

Dr Amoah said the government’s flagship 1D1F policy will not bear fruits if policies are not adopted to give it meaning.
Speaking to GhanaWeb to expand further on the topic, Dr Amoah said:
“ I don’t know how many times we must keep warning our policymakers about some of the rudiments and indispensable nature of post-colonial economic and social development

Now we can see how a 1d1f policy may sound good in concept but in practice becomes an albatross if you don’t join it up with a serious policy that protects your infant companies from external predators.

Almost all of Ghana’s post-colonial classmates enacted some protection for their new/young local businesses from external competition in their domestic markets… a practice that started with the UK, US, Germany, Japan to be continued by China and the Asian Tigers … but unfortunately to be ignored incomprehensibly by the independent African countries, taking advice from their colonial masters who still wanted and needed access to these African markets for the products of their factories.

The video of the Ghana Gas Cylinder company that has now been closed and their workers sent home because of easy entry by Chinese companies into Ghana is a practical manifestation of the consequences of free trade policy of a third-world economy.

Africa as a block must review her membership of the WTO and use her markets as an asset for the benefit of Africa first… and buy time to be efficient and competitive to strengthen her homegrown companies to be able to participate effectively and profitably in their domestic as well as in the global markets

This must be seen as an existential matter for Africa and its dismissiveness has been a key cause of the lack of growth and progress since independence and will continue into the future if Africa continues to ignore it. “

Source: www.ghanaweb.com