The President of the Association of Ghana Industries, Dr Humphrey Ayim-Darke, has bemoaned the probable risks associated with the 10% tariff imposed by the US in relation to Ghana’s cocoa exports.
According to him, a chunk of Ghana’s revenue is derived from cocoa; therefore, a hit could be a challenge.
He said the government must account for the deep interconnections between cocoa exports, import-based revenue, and Ghana’s overall fiscal health.
“If you look into the domestic revenue mobilisation, about 50 plus percent — just about 50 — comes from the ports, and these are largely imports. And then from export as well, which includes cocoa. Unfortunately, we know we had a cocoa drop by virtue of the events of the galamsey and the cocoa export,” he was quoted to have said by myjoyonline.com.
If government revenue should take a hit by external factors, he said; “It has a ripple effect on the macro… If you’re not getting enough domestic build, you slap more monetary policies on us.
“It will trigger the policy rate, lending rates. The cycle continues, and it has a consequential effect on the US Dollar as well, which is our medium of trading.”
While Ghana has been slapped with a 10% tariff by the US, its neighboring country, Cote d’Ivoire, has been slapped with 14%.
The AGI president said this calls for a collaboration between the two countries to secure their cocoa exports.
“We are also concerned about the disparity between the tariff on Ghana and Ivory Coast, where we are together seeking to harmonise our total cocoa export and the benefits to the farmers. Today, you are happy, but the next time, it will all catch up with you. You cannot look at this in isolation… We need to be concerned with looking at the macro picture and the micro picture,” he said.
Dr Ayim-Darke also lamented the effects of US inflation on inward remittances.
“Remittances have become part of our inflows. If the inflationary rate hits the U.S. by virtue of the tariffs and chocolate prices going up, and the consumers’ disposable income is reduced, how much remittance will come to your family? That will affect government, too,” he added.
SSD/AE
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