President of the Ghana Union of Traders, Dr Joesph Obeng, has expressed the need for government to enforce investment laws in the trading community.
According to him, the Bank of Ghana must “depart from the traditional ways of doing things” as it has enabled the proliferation of “black market” in the country. He revealed that there are fundamental issues to be addressed as the prices on the black market is higher than that of the banks. However, people are comfortable to trade on the black market despite the fact that “the bank is providing cheaper rate” .
Dr Obeng noted that most of the bigger multinational companies equally find it convenient to deal with even the black market, thereby creating more space for black market operators to trade. He highlighted that the traditional ways of doing things at the Central Bank, particularly with their “stringent requirement of document” is sometimes not convenient and comfortable.
“I agree that the major cause of our problem is excessive importation… But I have also said that we know where this problem is. We have investment laws and so if you want to deter excessive importation, then you use investment laws to drive potential investors to industrialization and more productive areas rather than encouraging them to the trading aspect or where it will increase dumping and we have the laws to do that.”
Dr Joseph Obeng
Central bank urged to relax documentation process
The GUTA President stated that instead of relaxing the documentation procedures, the banks undertake the process, “as if you’re under scrutiny or in a serious fraud office scrutiny”. This, he explained, deters people from even doing business through the mainstream banks.
“I think we have to relax on those things and make sure that people are encouraged to do business through the banks so they can have an idea of the actual volume of trading or importation that we do.”
Dr Joseph Obeng
Dr Obeng revealed that due to the greater number of businesses trading on the black market, most of the figures churned out by the Central bank on the “volumes of trading is speculative”. He opined that the bank does not know this because the bulk of trading is going through the black market.
“We use rules, regulations and laws to define these things. We use laws to make sure that forex is well arranged so the demand of it and the supply is [enabled] but if you leave it so empty without any rules and regulations, then the demand will always outweigh that of the supply because we leave some of our investment laws so loosely for people to have their way. So, I think we have to use our investment law to tighten [the space].”
Dr Joseph Obeng
The crux of the problem, Dr Obeng emphasized, must be dealt with by government instead of traders being blamed for their apparent voluminous importation into the country. He revealed that when conversation on importation and forex comes up “every Ghanaian will say traders import too much”.
“But we’ve said that our part of importation is about 15%, the bulk of the importation is done by the multinationals and it’s obvious… So, it cannot be said the blame be put on us when we know where the actual problem is.”
Dr Joseph Obeng
Dr Obeng equally bemoaned the ineffectiveness of laws to rein in the invasion of foreign nationals in the trading space. He indicated that these foreigners have “sadly” taken over key sectors which renders indigenous businesses unable to benefit from the economic system.
“We are not doing exactly so because what we have done in our investment law with the requirement you bring in $1 million in kind of goods. Mostly, they bring it in kind of goods and not even the lodgement of $1 million… What the law should have gone ahead to say is that they will ask you what capacity [and] what volume of trade are you coming to do and how much is required?”
Dr Joseph Obeng
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