As a result of
the current exchange rate situation in the country, businesses are seriously
bleeding to death, President of the Ghana Union of Traders Association (GUTA)
Dr Joseph Obeng has said.
He said the government, therefore, needs to do
something to salvage the situation as soon as possible.
“We want to call the attention of the
Government to the fact that depreciation of the cedi against other major
trading currencies is getting out of hand, and the increase in the monetary
policy rate is also leading to high lending rate in the country.
“Businesses have reached a situation where its
survival is seriously threatened, if no immediate action is taken by the
Government to find solution,” he said in a statement on Sunday Augist 7.
By this statement, “we are calling on the
Government, as a matter of urgency, to reconvene the Foreign Exchange Committee
that was set up a few years ago by the Finance Ministry which involved all
relevant stake holders, to help find immediate solution.
“It could be recalled that since December 2021
when the dollar was 6.4 cedis, our working capitals have been depleted by 40%.
Now that, the dollar has reached about 9.00 cedis, our worst fear is that we
are now going to make Christmas orders from our suppliers, which may aggravate
the situation.
“If immediate remedial measures are not taken
to control this alarming situation, we may be using One Million Ghana cedis to
buy only One Hundred Thousand US dollars when the dollar reaches 10.00 Ghana cedis.
“At this point in time, if nothing is done,
speculations would be rife and serious panic will set in for people to invest
in forex as a matter of security for their hard-earned working capital, thereby
make control of such a situation difficult for the government.
“We recognize that excessive importation is
one of the major causes. Here we think that the government has failed to take
due advantage of our National Investment Laws, especially on foreign retail
trade and wholesale to tighten imports.”
Below is his
full statement…
BUSINESSES
BLEEDING TO DEATH
As a result of the current exchange rate
situation in the country, businesses are seriously bleeding to death.
The Government, therefore, needs to do
something to salvage the situation as soon as possible.
We want to call the attention of the
Government to the fact that depreciation of the cedi against other major
trading currencies is getting out of hand, and the increase in the monetary
policy rate is also leading to high lending rate in the country.
Businesses have reached a situation where its
survival is seriously threatened, if no immediate action is taken by the
Government to find solution.
By this statement, we are calling on the
Government, as a matter of urgency, to reconvene the Foreign Exchange Committee
that was set up a few years ago by the Finance Ministry which involved all
relevant stake holders, to help find immediate solution.
It could be recalled that since December 2021
when the dollar was 6.4 cedis, our working capitals have been depleted by 40%.
Now that, the dollar has reached about 9.00 cedis, our worst fear is that we
are now going to make Christmas orders from our suppliers, which may aggravate
the situation.
If immediate remedial measures are not taken
to control this alarming situation, we may be using One Million Ghana cedis to
buy only One Hundred Thousand US dollars when the dollar reaches 10.00 Ghana
cedis.
At this point in time, if nothing is done,
speculations would be rife and serious panic will set in for people to invest
in forex as a matter of security for their hard-earned working capital, thereby
make control of such a situation difficult for the government.
We recognize that excessive importation is one
of the major causes.
Here we think that the government has failed
to take due advantage of our National Investment Laws, especially on foreign
retail trade and wholesale to tighten imports.
Allowing foreigners into the retail trade and
wholesale sectors of the economy will not help this country, but rather defeat
the action plan set for the implementation of 1D 1F, AfCFTA and the general
industrialization in Ghana.
We also want to remind the Government that the
big-time institutional importers, especially, those who serve as conduit for
dumping goods mainly from China are the culprits.
Small and Medium Scale importers like GUTA
members import only 15% out of the whole volume of imports into the country.
For the locals, the import business has become
gloomy and pathetic as the multinationals have taken over. We have started
looking out for goods to export to support the economy and be able to sustain
our businesses, but the same cannot be said of these foreigners.
We, therefore suggest that since they do not
bring in physical cash to invest but rather resort to dumping and repatriate
our hard-earned foreign exchange as a country, the investment law should be
amended to make them deposit their capital fund here in Ghana to make their
transfers.
Most of these foreigners come under the guise
of manufacturing but divert to trading; taking advantage of the loopholes in
the laws, as well as the lack of enforcement of same, and cause damage to our
economy.
The juiciest part of our economy such as the
banking, telecommunication, oil, mining – the extractive industries are all
dominated by foreigners and repatriate all their profits to their home
countries leaving us with virtually nothing except the few taxes and some
royalties.
We herein suggest that the Government should
device an effective method to schedule this repatriation in a staggered manner
over a reasonable period, apart from revising the investment law to ensure that
investments in all these profitable and juicy areas have some reasonable equity
for retention in Ghana rather than the current situation where these companies
consume all our foreign exchange earnings.
Most foreign direct investors overpriced their
investment in order to have an advantage to repatriate same value to their home
countries to our detriment. This explains the reason we hardly physically see
these investments corresponding with the amounts that are being declared as
foreign direct investments in the country.
Over dependence on foreign services such as
health care, education and others by Ghanaians are also to be blamed for this
problem.
The movement and transfer of money by churches
should also be closely monitored and controlled.
We believe that the government should have the
full control of management of our national resources as well as, the capability
to solve this problem in the shortest possible time; unless this rapid
depreciation of the cedi is a deliberate plan by the government to devalue our
national currency.
How can we go on like this as a nation?
because this is not just a simple matter of passing on the cost to the
consuming public. The purchasing power of the consumers is drastically reduced
due to high inflation rate and other factors. As a result, consumers are not even
buying at the moment, let alone increasing the prices. Businesses turnover are
negatively affected, thereby rendering us unable to service our loans,
especially for those whose capital is borrowed from the commercial banks and
other sources.
At this stage the only prudent thing to do, is
to hold unto your stocks without selling, but the problem here is, you might be
owing your suppliers and banks, at the same time you cannot also punish the
consuming public.
The only option now, is for the Government to think
outside the box and find a pragmatic solution to bring the economy back to its
feet.
We agree that there is a problem in the world,
which Ghana is no exception. This period is the best time to bring leadership
skills to bare and make a difference, of course, with the support of all
Ghanaians regardless of political leaning.
Businesses are indeed bleeding and are in dire
need of emergency rescue.
Thank you.
Doctor Joseph Obeng
PRESIDENT
Source: 3news.com