The President of the Association of Ghana Industries (AGI), Dr. Humphrey Ayim-Darke, says the benchmark value is distorting the macro fundamentals of the country’s economy.
According to him, though the country’s economy has been experiencing some progress, should the placement of benchmark value discounts on goods be encouraged, it would reverse all the gains the economy has made and distort Ghana’s economic model.
Speaking on JoyNews’ PM Express, Dr. Ayim-Darke noted that benchmark values go all the way to the roots of creating inflation.
He said, “The benchmark discount value also became a position. Recall this, AGI has stated that besides the pricing factor that our brothers from GUTA keep making a string case on the benchmark value, we did say that it’s distorting the macro fundamentals of our economy because it goes all the way to the roots of creating an inflation.
“And you can justify that by the Bank of Ghana Monetary Committee’s report and it indicates the food basket and how it affects the trend of inflation. And it talks about construction and non-food basket which includes oil. So we keep stating that these are distorting the economic fundamentals and we’re now seeing them coming strongly,” he said.
The AGI President was speaking on the rapidly depreciating Cedi and its implications on the conomy.
He had earlier stated that contributory factors to the phenomenon was the lack of a proper retention clause to enable the government shore up more dollars than it allows repatriated, as well as the benchmark value discounts.
He had explained that should the government leave the repatriation of dollars by multinationals unchecked it could lead to dire consequences for the currency and the economy as a whole.
According to him, even the country may be enjoying an exportation surplus among other things these contributory factors prevent the country from experiencing any significant benefits.
“So yes we have surplus, but trace it to the oil and trace it to the retention clauses and then proceed further to see that the entire economy has not changed significantly though it is in progress.
You could see that a number of initiatives have been put in place in agriculture. We know of the fertilizer, the planting for food and other ones in the poultry industry. But the AGI stated that the benchmark discount value becomes a reversal and a distortion to the economic model,” he said.
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