Benchmarks would make imports expensive than local goods, says Trade expert
Countries use benchmark policies to protect their local industries, Awinador Kanyirige
Govt must reverse benchmark discount for the benefit of the country, Trade consultant
An international trade consultant, Maame Awinador Kanyirige, has said the reversal of the benchmark discount policy was critical for Ghana to benefit from the African Continental Free Trade Areas (AfCTA) agreement.
According to her, the benchmark value policy would increase the price of imported items to the benefit of local manufacturers.
Speaking in an interview with B&FT, Awinador Kanyirige said the increase in the price of imports would help local manufacturers compete adding that the discounted benchmark imports were cheaper compared to locally manufactured goods.
“One of the major things any country that is trying to develop does is try to increase the cost of imports. So, for example, when India wanted to boost its automobile industry, it increased the cost of imports on foreign-produced cars so that people could patronise locally produced cars.”
“So, one of the ways that the AfCFTA will become effective is to increase the cost of imported goods, so that it will help local consumption and the whole goal of exporting locally produced goods out of Ghana will be in effect. This policy will not affect parties to the AfCFTA agreement because there are provisions for countries that are parties to it. What it will really do is that it will help local producers,” the trade consultant was quoted by B&FT.
She urged the government not to be perturbed by agitation of stakeholders in the import value chain on its decisions to reversal the discount on the benchmarks.
She said the reversal of the benchmark is the only way to break the country’s over-reliance on imports and the way to move the country towards value addition.
“There is a realisation that we rely heavily on imports; so, of course, some traders will be disappointed. But despite this, it will help us to become more independent as a state and we will move away from relying on raw materials to become a value-added economy. So, it is a necessary policy because, in the long-run, it will make us self-reliant.”
“Attached to this policy, government must ensure that it does more to make producing locally cheaper – and not just make imports expensive – so that there is proper competition on the market,” she said.