As President John Mahama’s administration takes decisive steps to eliminate illegal charges at Ghana’s ports, economist Dr. Paul Appiah Konadu has thrown his weight behind the move, arguing that such enforcement is not only fair but also critical to controlling imported inflation and supporting industrial growth.
In an interview with The High Street Journal, Dr. Appiah Konadu clarified that some of these illegal charges are unapproved exchange rates used by these shipping lines. While the Bank of Ghana has pegged the cedi to the dollar at GHC 10.3 or GHC 10.5, some recalcitrant shipping lines are defying the BoG’s orders, charging as high as GHC 13 to the dollar.
This, he says, is a direct contributor to rising import costs, which ripple through the economy in harmful ways.
“What the Ghana Shippers Authority is talking about are illegal charges. For instance, when it comes to the exchange rates, some of the shipping lines are using at the ports. The Bank of Ghana’s official exchange rate is between 10.3 and 10.5, but at the ports, some of the shipping lines are using 12.5, 12, and 10,” he said.
Hidden Charges, Visible Consequences
According to the economist, these unapproved charges are not just a technical issue. They inflate the prices of imported goods, including machines, spare parts, and raw materials that local manufacturers rely on, hurting efforts at industrialization.
Dr. Konadu warned that these practices are fueling imported inflation, particularly in a country like Ghana that still depends heavily on imported industrial inputs.
He emphasized that tackling the problem head-on will ease inflationary pressures and enhance cost competitiveness for businesses trying to produce locally.
He emphasizes that imports are not just rice and clothes. Manufacturing companies import intermediary inputs and capital equipment. When shipping lines impose arbitrary exchange rates or unapproved fees, it makes local production more expensive, and that filters into consumer prices.
“Imports are not just finished products. There are some manufacturing companies that import intermediates and also machines. So if shipping lines are using unapproved charges, which artificially raise the cost of import, that also builds into the cost of production. And even for finished goods, if shipping lines are imposing unapproved charges, that is not fair. That disturbs the market. That artificially raises the prices of imported commodities,” he indicated.
No, This Won’t Undermine Local Industry
There have been fears in some quarters that clamping down on port charges could make imported goods cheaper, undermining local products. But Dr. Konadu dismissed that concern, noting that the goal is not to subsidize imports, but to remove distortions.
The economist maintains that this is not about making imports artificially cheap. It’s about ensuring that no one, especially shipping lines, imposes illegal costs that should not exist in the first place.
He further stressed that local production must be competitive on its own merit, and that inflated import costs do not protect the domestic industry, but rather increase costs for businesses that depend on imported tools and inputs.
He says, “Given that we are not able to produce those goods on the domestic markets, that artificially raises the price, which builds into inflation, which causes imported inflation, I think it is important that the right thing is done. It is important that we enforce regulations.”
Dr. Konadu praised the ongoing engagement between the Ghana Shippers Authority, the Bank of Ghana, and shipping firms as a step in the right direction.
