There has been a wave of discussions about laying a ban on or restricting certain imported items, a proposition made by the Minister for Trades and Industries, Mr. K.T Hammond. But with the current roll-out of an International Monetary Fund (IMF) programme and its terms and conditions, the Ghanaian government may well search for other alternatives to cushion its fiscally challenged economy.
Following the continuous introduction of new tax components on goods in order to resuscitate its seemingly dying economy, exacerbated by the Covid-19 pandemic, the New Patriotic Party (NPP) led government continues its search for viable means to alleviate the hardship.
This time, a proposal to ban certain imported items had been in contemplation, and quite evidently, had been close to being implemented on the back of agitations and reproach from both ordinary citizens and the minority caucus in parliament.
However, as one of the conditions for its IMF programme, Ghana itself may have been restricted from banning or restraining imported items. The IMF stated that for the sake of balance of payment purposes, the government of Ghana would be under the obligation of not imposing restrictions on importation.
This was the agreement signed by both parties in the $3 million IMF programme.
“No imposition or intensification of import restrictions for balance of payment reasons,” page 76 of the document indicated.
This was stated among four conditions attached to the roll-out of the programme. The Fund stressed that adherence to these obligations would be frequently monitored
No imposition or intensification of restrictions on making payments and transfers for current International transactions.
No introduction or modification of multiple currency practices.
No conclusion of bilateral payments agreements inconsistent with Article VIII of the IMF Articles of Arrangement.
No imposition or intensification of import restrictions for balance of payment reasons.
Meanwhile, the government has suspended the decision to lay before parliament the L.I which spells restriction measures on the importation of some 22 listed by the trade Minister. This was preceded by pressure from the minority caucus to rescind the decision.
The approach, if executed would require anyone seeking to import the listed items to obtain authorization from the ministry of trade and Industries.
According to the trade Minister, his proposition could have helped the cedi appreciate.
There have been concerns raised about certain imported items due to the reason that said items could be produced locally in order to maintain cash flow within the country.
Ghana depends heavily on importation for agricultural products, vehicles, transportation services, as well meat. However, the importation of meat on a large scale has been a major concern for experts and commentators, as it is believed that the country has the potential to become a major exporter of said items instead.
“The West African country also depends on agricultural imports, subsequently satisfying the nation’s needs in this field. The annually increasing proportion of food in merchandise imports cannot be overlooked. As of 2020, food imports mainly consisted of cereals and cereal preparations, meat and meat preparations, fats, and oils. For instance, palm oil imports amounted to nearly 200 million U.S. dollars in 2020, while the value of sugars and confectionery imports reached around 158 million U.S. dollars in 2019,” a report published by Doris Dokua Sasu of Statista on, November 21, 2023 said.
The government could have to wait for the three years span of the programme to elapse before introducing the ban.
The Fund also recently lauded the government for adhering to the directives of the programme thus far.
But it might have to do extraordinarily well in the eyes of ordinary Ghanaians to get another mandate in the coming general election.