Executive Secretary of the Food and Beverage Association, Sam Aggrey, says the business community is not feeling the effects of the recent appreciation of the cedi, insisting the dollar gains mean little without corresponding tax reliefs.
“Dollar depreciation is not being felt at all. We take it from two-fold. If you look at what has been in the past, where the cedi started depreciating, from ¢3.80 up to ¢16, you can imagine how much business investors have lost, and also the country itself,” he said on JoyNews’ PM Express on Thursday, July 3.
According to him, the recovery of the cedi has come at a heavy cost to businesses that are yet to recover from earlier shocks.
“So, for the cedi to appreciate again, you look at how much you have lost during the appreciation. So you’ve been hit with one bullet, hitting you twice. So it’s a bit dicey. If you say it’s a good gain for other people and others too lost.
“It’s a good thing for it to happen, but then we are looking at where government will also come in, as it were, reduce certain taxes for people to have the real feel of how much the effect of the cedi will be,” he explained.
Sam Aggrey argues that until government cushions importers through policy shifts, especially at the ports, the average business will continue to suffer despite the strength of the cedi.
“As it is now, if we say the cedi has come down, so it should take it like that, the driving force that brought about the cedi depreciating again is also appreciating. Whatever has been done to make sure that the cedi gains its strength needs to be continued,” he stated.
He pointed directly to policy decisions he believes worsened the depreciation in the first place, calling for an overhaul of the entire tax regime to ease the burden on importers.
“And then you look at what about the depreciation of the cedi? It was the introduction of certain taxes and levies at the port. That is where you really see the effect. I remember we met Finance Minister Ken Ofori-Atta when he said he was going to go the full recovery, 100% of the benchmark value.
“We told him, ‘Look, this will be a disaster for this country, so take it easy, let the cedi remain where it is.’ Because the very moment you increase, you see the cedi also driving itself without any push, it will start depreciation further.”
He said that the advice was ignored, leading to deeper challenges for businesses.
“At that time, when it was going to do that, the cedi was around ¢11 to a dollar, but he didn’t listen, and he went up to increase certain taxes, and that brought about the high import duties and all that. So we realised that the cedi would not stay where it was. And then what happened? We started losing money in this area.”
Sam Aggrey concluded with a strong call for policy change.
“So it will take another step back or step forward in bringing some of these things down as we enumerated during campaign visits. There are almost 21 different taxes that are imposed on one item, so we want an overhaul of the tax system to bring us some relief.”
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