Trade Ministry pushes for law to promote patronage of local goods

As part of strategic interventions to stimulate and sustain domestic trade, the Ministry of Trade and Industry(MoTI) is considering a legislation that seeks to promote patronage of indigenous products and services.    

This has become necessary owing to the fact that it has been increasingly difficult for local manufacturers to enter the next stage of the production cycle – that is the actual sale of their products. Food imports alone reportedly cost the country some US$2.4 billion annually.

Since Ghana liberalized its international trade regime back in the 1980s, local manufacturers have found it increasingly difficult to withstand competition from imported versions of what they make, because they are not sufficiently competitive with regards to both product quality and pricing.

However, Ghana is not in a position to disregard the World Trade Organization’s global trade framework which insists on minimal import tariffs and bans on specific imports which would have given their local manufacturers protection from competing imports.

Ghana imports mostly industrial supplies, capital and consumer goods and foodstuff. Its main imports partners are China, United States, Belgium, United Kingdom and France. Instructively, since it liberalized its trade framework, Ghana has usually incurred merchandize trade deficits each year which have contributed to the cedi’s continual depreciation.

However, Ghana has been achieving trade surpluses consistently for the past nine quarters, beginning from the last quarter of 2016. This, however, has been driven primarily by the substitution of much of the hitherto imported light crude oil used for power generation with locally generated natural gas from its three operating oil and gas fields. 

The inability of local manufacturers to compete with imports on domestic markets has cost Ghana in terms of jobs as well.

The legislation is expected to provide an enabling environment for goods produced locally to have some form of preference in the local markets space.  

This would ensure that the chains of stores, malls and super markets would have some sections of their shelves reserved solely for made in Ghana goods for people to patronize.

Two years ago, MoTI launched a policy to guide the promotion of indigenous goods and services, with a commitment to enact a legislation to back its implementation. The goal of the policy is to encourage institutions, both public and private to patronize locally made products and services.

To ensure market penetration and visibility for made in Ghana products, the ministry has begun engaging manufacturers in workshops and training on the need for proper packaging of locally produced goods. This seeks to promote visibility of locally made products in the international markets.

Speaking to the Goldstreet Business, Deputy Minister for Trade and Industry, Mr. Carlos Ahenkorah said the move for legislation was meant to assist manufacturers sell most of the products locally and to drive interest in the consumption of local goods.

“Government will create an enabling environment where products that are churned out of the industrialization drive are taken off from the manufacturers by consumers. If we don’t have a way to provide off-takers, manufacturers will find it difficult to acquire funds to enter the next stage of production” he noted.

Aside this, there are plans aimed at improving the domestic retailing infrastructure. This will ensure that domestic products are sold in a good environment to attract buyers,just like what is seen at various malls and supermarkets.  

This drive will encourage people to pick goods from particular, well-appointed retail outlets where local products are exhibited.

By Dundas Whigham