Control foreign exchange market -
Asenso-Okyere
Export sector
poised to yield 16 billion dollars - Akyea
Anaman is President of Chamber of Mines
Control foreign exchange market -
Asenso-Okyere
Accra (Greater Accra) 12 January 2001
An economic expert on Thursday called on the government to institute time-bound control measures on the foreign exchange market to allow effective planning towards stabilising the cedi.
Professor Kwadwo Asenso-Okyere, Director of the Institute of Statistical Social and Economic Research (ISSER) of the University of Ghana (UG), Legon, making the call at the 52nd annual New Year School, organised by the Institute of Adult Education (IAE) of the UG, said this will improve the country's competitiveness in international trade.
"It has become necessary for some sort of managed or controlled float under which the exchange rate is allowed to hold within a stipulated period to be adopted," he said. "Such a policy would allow for rational planning for international trade and the stability of the cedi."
He said the floating exchange rate policy being pursued by Ghana in the midst of a weak economy has contributed to the continuous depreciation of the cedi with its resultant unfavourable balance of payment.
"In 1999 the cedi depreciated by 33 per cent as compared to 4.1 per cent in 1998. The volatility of the cedi continued in 2000 with a 45.2 per cent depreciation against the dollar in August 2000," he said.
Prof. Asenso-Okyere said the depreciation of the cedi should have stimulated exports, adding that the country has not witnessed substantial increase in exports or decrease in imports.
He said the rampant fluctuation of exchange rates coupled with the high interest rates, tariffs and corporate taxes, make it difficult for exporters and importers to plan effectively for even the immediate future.
"As a result of the de-regulation of the banking sector in August 2000, lending rates stood at an average of 47.75 per cent," he said
In effect producers are either unable to get access to credit for business or are not able to remain competitive on the international market even when they have credit.
"This situation calls for a fixed exchange rate regime on both the inter-bank and forex bureaux markets to allow businesses to plan over a period of time with certainty and remain competitive," Prof. Asenso-Okyere said.
"Although banks have de-regulated, they must be encouraged to reduce the large spread between the lending rate and the borrowing rate so that interest rates can come down," he said.
Prof. Asenso-Okyere said when there is a fixed foreign exchange regime there would be increase in exports and a curb in imports to improve the nation's share and participation in the global economy.
"The large amount of imports has negatively affected the balance of payment of the country and contributed to the rapid depreciation of the cedi.
"For instance, from 1995 to 1999 the trade balance moved from negative 256.6 million US dollars to negative 850.1 million US dollars," he said. "This must be a worry to development practitioners and so steps must be taken to either improve exports or curb imports."
He suggested that promising entrepreneurs should be selected and assisted to expand production in order to improve exports.
"Another way of benefiting from the opportunities of globalisation is for Ghana to be competitive. In this respect, Ghanaian exporters have to be competitive in price, quality, quantity and delivery time."
Prof. Asenso-Okyere said a supportive macro-environment is needed to hold everything together so that the private sector, which is the engine of growth, can thrive.
He stressed the need to strengthen regional ties by harmonising national and regional economic policies to ensure that developing countries at different levels of development benefit from the global economy through economic groupings.
GRi…/
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Export sector
poised to yield 16 billion dollars - Akyea
Accra (Greater Accra) 12 January
2001
Mr. Tawiah Akyea, Executive
Secretary of the Ghana Export Promotion Council (GEPC), on Thursday said the
export sector of the country is poised to yield a total of 16 billion US
dollars by the close of year 2020 to make Ghana's middle income target a
reality.
"A review of past experiences
in the export sector provides confidence and hope that this is achievable
within the given period," he said.
Mr. Akyea was speaking at the
on-going 52nd annual New Year school organised by the Institute of Adult
Education (IAE) of the University of Ghana (UG), Legon.
It is aimed at evolving
recommendations that will assist policy makers to strategise for the country to
have greater stake in the evolving global economy.
Mr Akyea said it has been
estimated that for Ghana to achieve a middle income status by year 2020,
exports should be returning a total of about 16 billion US dollars.
"Out of the figure, 12
billion US dollars is expected from non-traditional exports and four billion US
dollars from traditional exports," he said. "Additionally, experts
have forecast that Ghana's annual per capita income which currently stands at
400 US dollars, must rise to 1,700 US dollars to make the target a
reality."
Mr Akyea said "we have no
choice than to achieve this goal - if not the economic impact threatens to
result in intense poverty which is likely to lead to an equally intense social
crisis, a recipe for Ghana to be eradicated from the world map."
Available statistics indicate that
at the close of 1999, total export earnings stood at 2,435.41 million US
dollars, comprising 2,031 million US dollars from traditional export and 404.41
million US dollars from non-traditional export.
Mr. Akyea said specific measures
have been put in place to strengthen arrangements designed under the Economic
Recovery Programme (ERP), whilst steps are underway to effectively address
identified constraints and bottle-necks in the export sector.
He mentioned the constraints as
supply, inter-mediate or logistic and demand or marketing aspects, adding that
specific measures are in place to stem all those tides.
"It is in this light that the
passage of the Export Development and Investment Fund (EDIF) Bill into law by
the last parliament should be seen as truly historic," he said, adding:
"This will help address the numerous impediments existing in the export
sector".
For supply, he said, among other
things, that efforts are underway to create a large producer base while
intermediate constraints will be addressed through infrastructure development.
Mr. Akyea said effective linkages
are also being created among industries in the free zones to ensure that the
manufacturing industries among them could source their raw materials locally
from cottage and satellite industries.
This, he said, will have a
spin-off effect of growing local small-scale and medium-scale industries to
contribute effectively to increased local production.
"In the ultimate, our export
capacity will grow to meet imports and consumption levels with the resultant
high foreign exchange earnings," he said.
Mr. Akyea said current trends in
the export sector indicate a gradual decline in earnings from the traditional
exports sub-sector as the prices of gold and cocoa soared on the international
market and the forest from where timber is got fast depletes.
"The future of the economy
therefore depends largely on non-traditional exports comprising everything
other than gold, timber, cocoa and electricity, which have chalked an
impressive growth in recent times.
"Socio-economic indicators
show that if Ghana's import capacity breaks down, the entire economy will
degenerate - Whilst we cannot stop importing, we have to build our export
capacity to at least level up with imports to allow for favourable balance of
payment and economic progress," he said.
Mr. Kofi Kludjeson, President of
the Association of Ghana Industries (AGI) called on locally based large scale
industries which import raw materials to support cottage industries to grow and
serve as sources of raw material.
This, he said, would not only
reduce the level of imports, but also improve local income generation and
create a better environment for industry to grow.
GRi…/
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Anaman is President of Chamber of Mines
Accra (Greater Accra) 12 January 2001
The reconstituted Executive Committee of the Ghana Chamber of Mines has named Mr James Kwamena Anaman, Corporate Affairs Manager of Ashanti Goldfields Company, as its president.
He takes over from Mr B.O. Adoo, Managing Director of the Ghana Bauxite Company who has completed his term of office.
A statement in Accra on Thursday said Mr Richard Graeme, Managing Director of Goldfields Ghana Limited, and Mr Rueben Damptey of the Precious Minerals Marketing Corporation are to assist Mr Anaman as first and second vice-presidents respectively.
Other members of the committee are Mr Joe Phillips, Abosso Goldfields, Mr Volker Zeiltler, Ghana Manganese Company Limited, Mr Len Commerford, PW Ghana Limited, Mr Keith Baptist, Resolute Amansie and the Chief Executive of the Chamber of Mines.
GRi…/
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