Dr Bannor raised the concerns in response to Finance Minister Dr Cassiel Ato Forson’s economic strategy, which seeks to boost domestic production, reduce Ghana’s dependence on imports and create jobs through the government’s 24-Hour Economy initiative.

According to Dr Bannor, a stronger cedi can reduce the cost of imported goods in local currency, potentially making foreign products more attractive to consumers than locally manufactured alternatives.

He argued that the situation could undermine the government’s objective of encouraging Ghanaians to consume locally produced goods while reducing the country’s import bill.

“You are facilitating the taste for imported products and yet, you say you want to increase local production of products. For who to buy when imported substitutes are cheaper?” he questioned.

The economist maintained that exchange-rate policy and industrial development must be considered together, particularly when local manufacturers continue to face high production costs.

He argued that if imported products become cheaper while domestic producers struggle with production expenses, local industries could find it difficult to expand despite government incentives.

Dr Bannor therefore called on the Finance Minister to explain how the government intends to reconcile its exchange-rate management strategy with its import substitution objectives.

However, Dr Forson has defended the government's economic approach, describing the import substitution agenda as a means of increasing domestic production, reducing foreign exchange demand and strengthening the economy.

The Finance Minister has also stated that the government’s New Economy programme seeks to direct investment towards productive sectors, encourage local manufacturing and create employment opportunities.

Under the policy, government aims to produce more of the goods consumed locally, thereby reducing dependence on imported products and easing pressure on foreign exchange.

The debate highlights the challenge of balancing exchange-rate stability, affordable imports and the protection of domestic industries as Ghana pursues its economic transformation agenda.

While Dr Bannor questions the compatibility of the policies, the government maintains that increased domestic production will ultimately reduce import dependence and support economic stability.

Photo courtesy: 3news