The country needs to ban the export of some raw agro products that it has the capacity to add value to, the Association of Ghana Industries (AGI) has advocated.
Placing an embargo on all agro products that domestic manufacturers have the capacity to add value to would correct the imbalance of trade, and create economic value and jobs, President of AGI Dr. Humphrey Ayim Darke said.
He said the economy gains very little from exporting raw materials, as prices of such primary products are mostly determined by the importing countries. He, therefore, said it would be in the country’s best interest to give the right of first refusal to local manufacturers for certain raw materials.
“Why should it be the case that paddy rice is exported in its raw state while we have factories in Ghana which could add value to it?” he asked.
Dr. Darke spoke at an Indian-Ghana Business summit in Accra, and warned that this has serious implications for the “macro-economic fundamentals and job creation prospects”.
He mentioned the weak balance of trade, declining contribution of industry to national output, and shrinking job opportunities as some of the problems caused by the export of raw materials.
“We have vast arable land for agriculture, and yet we have not done enough in adding value to our raw materials over the past decades. So, I am of the view, to some extent, that some agriculture products should be banned from export in their raw state,” he said.
Although he admitted the idea may sound ‘protectionist’, he said it is the surest way to create real value, and spur economic growth and job creation.
For a sector like agriculture whose contribution to national output has been declining in the past few years, he believes such a move would do it a lot of good.
Dr. Darke, therefore, said agro-products should only be allowed to be exported raw when there is no local capacity to add value since this will help correct trade imbalance, create jobs and boost industry and agriculture contributions to gross domestic product.
Explaining further, he said: “Our export structure has not changed significantly over the years. We over-rely on primary products with little value-addition.”
Dr. Darke, therefore, urged the gathering, which included Indian businessmen and women and manufacturers, to take advantage of opportunities along the agricultural value chain, especially agro-processing – adding that Ghana stands out as having one of the most favourable conditions for salt production in Africa.
“I am sure you will all agree with me on the need to explore bilateral relations that will help increase the value of our exports to offset our trade imbalance.”
Indian High Commissioner
For his part, the Indian High Commissioner to Ghana, Sugandh Rajaram, said relations between the two countries date back many decades.
He said cooperation between Ghana and India are characterised by friendship, mutual respect, trade and creation of shared prosperity.
Source: Business and Financial Times