EU input to the public consultation on Export and Import Regulations 2023 


EU input to the public consultation on Export and Import Regulations 2023 

From a policy perspective, while understanding the stated objective of the law to foster the domestic production of some strategic products and improve the balance of payments, we consider that those legitimate objectives would not be achieved by this legislation as currently drafted.

The introduction of a cumbersome system of non-automatic import licensing would deteriorate the business climate by increasing the uncertainty and the cost of doing business in Ghana. The introduction of another non-transparent and arbitrary procedure for imports (already burdened by several tax and fees) will definitely reduce the attractiveness of Ghana as an investment and business destination in West Africa. This policy is therefore at odds with the efforts that the World Bank, the EU and other international partners are making to facilitate and enhance foreign investment in Ghana.

Moreover, it would likely trigger higher inflation as there is insufficient local production capacity for some of the products listed for import restrictions and domestic production needs time to adjust to meet prevailing demand. These inflationary pressures may also spread into other sectors, thus hindering the competitiveness of the Ghanaian economy. Consumers would bear the brunt of these consequences, facing higher prices and reduced access to essential goods.

Finally, the evidence from other jurisdictions in West Africa implementing similar import restrictions (ban and non-automatic licenses) show little improvements of local production. The further development of the local production requires policies and investments, in order to address structural factors such as cost of inputs, sanitary and phyto-sanitary controls,regulatory and infrastructure compliance, logistics, and reliable energy supplies. If import restrictions are not coupled with an effective and substantial support to domestic production, import substitution does not work, as the higher costs of production still make local products non-competitive vis-à-vis most imports, with no guarantees on covering domestic demand.

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