We had a situation where forex holdings on behalf of businesses and individuals in our commercial banks amounted to over $3 billion.
In addition, our economy had become increasingly dollarised. Hotel room rates, vehicles, rents, school fees, household appliances, consumer items, cosmetics, clothes and other items were all quoted in dollars. The obvious problem with this is that, the dollar is not our national currency. The currency of Ghana is the cedi, and the cedi would only gain strength if we begin to view and use it as that, our nation's only currency.
The Attorney-General and the Economic and Organised Crime Office (EOCO) have been charged to monitor the situation and severely sanction any institution advertising rates or prices and charging in foreign currency. A directive to the same effect has also been issued to government agencies.
d. Transforming our economy
Mr Speaker, the basic structure of our economy has not changed from colonial times. The Gold Coast was designed by the colonial administration to be exporters of raw material and importers of finished goods. This is what best served their needs and purposes.
After independence, our first President Osagyefo Dr Kwame Nkrumah of blessed memory, sought to break this vicious cycle by establishing numerous state- owned industries to produce consumer products for the domestic market as an import substitution measure. Unfor- tunately, the management of these state enterprises became a challenge and soon they turned into a very huge expense on the budget. A decision was therefore made to divest these enterprises to the
private sector. Unfortunately, in many cases, the domestic private sector was unable to leverage the financing needed to revamp these industries and bring them back into production.
Mr Speaker, the result is that, we are still largely dependent on the export of raw materials, gold, cocoa, timber, oil and mineral exports and on the import of finished goods. That is still the basic structure of our economy.
Mr Speaker, that was why in the beginning, I said that there was the need for change.
Mr Speaker, a fundamental problem of our economy is that, we do not make what we consume. This was the situation the late General Acheampong sought to address with the “Operation Feed Yourself and “Operation Feed Your Industries” programmes, which were aimed at strengthening Ghana's ability to be self-reliant.
Mr Speaker, in 2013 alone, we spent a whopping amount of almost $1.5 billion in foreign currency on the import of rice, sugar, wheat, tomato products, frozen fish, poultry and vegetable cooking oils. Rice accounted for $374 million, fish $283.3 million; wheat $226.7 million; poultry $169.2 million; cooking oils $127 million; and tomato products $112.1 million.
Mr Speaker, imagine if this money had been retained and spent in Ghana. Imagine if it had gone into the pockets of Ghanaian entrepreneurs who would, in turn, spend those Cedis at markets, restaurants, beauty shops, pharmacies, shopping centres and other Ghanaian enterprises.
When Ghanaians produce goods that other Ghanaians use, they are then able to re-invest that revenue back into the very communities that patronised them. The
money flows in a current, and it fortifies the nation's economy. Mr Speaker, that is the best use of a nation's currency. Imagine all that we could achieve, if in one year, we could spend as much in Cedis on locally produced rice, sugar, wheat, tomato products, frozen fish, poultry, vegetable and cooking oils, as we spent in dollars on those very same imported items last year. Just imagine!
Mr Speaker, as we all know, raw material exports are subject to price fluctuations on the international market. Countries that are dependent on raw material exports are therefore subject to wild cycles of booms and busts.
Mr Speaker, 57 years after independence, we need to take a pause and ask ourselves some critical questions. Can the current structure of our economy carry us to the next level? What changes must we make to create an economic structure that would serve our needs and purposes? [Interruptions] --
Order, Order! Tweea, mo nnyē din! Keep quiet and listen, it is a leson in economics
Mr Speaker, between 2012 and 2013, Ghana lost $1.3 billion in export revenues on account of the decline in cocoa and gold prices. At the same time, our import bill rose dramatically from about $7 billion in 2009 to $12 billion dollars in 2012.
Can we, as a nation, continue this unbridled importation of everything from plastic dolls to toothpicks? Must we continue to rely on a narrow band of raw material exports? Were we born to be a nation of only shopkeepers and traders? My definite response to these questions is a big NO!
Once more, Mr Speaker, we return to the need for change in order to facilitate growth. We must change the structure of
our economy. We must reduce the importation of items that we have a comparative advantage to produce. We must add value to our exports through primary, secondary and tertiary pro- cessing: add value to our cocoa by increased domestic processing; refine our gold before export; pursue Nkrumah's dream of an integrated bauxite and alumina industry and halt the export of raw bauxite. We must revamp Tema Oil Refinery (TOR), revive Bulk Oil Storage and Trans- portation Company Limited (BOST), Volta Aluminum Company Limted (VALCO), Tema Shipyard and Drydock and the many other strategic industries that serve as extra pillars for our economy.
Mr Speaker, in compliance with the Constitution, I am required to present this House with a medium term development framework before the close of this year. I have dialogued with the National Development Planning Commission (NDPC) that is working on this plan and urged them to come out with a plan that fundamentally addresses this weakness in the structure of our economy. I have specifically tasked them to handle the process in a way as to create a buy-in from all Ghanaians irrespective of political affiliation or societal status.
This is not a time to stand divided along any lines; this is not the time to stand on the sidelines; this is the time for us to stand together, as Ghanaians, on the side of Ghana.
In the interim, to kick start this process of transformation, I have tasked the Minister for Trade and Industry to request that the Export Development and Agriculture Investment Fund extend assistance to local investors for the increased production of poultry, rice, tomatoes, vegetable oil, and fish.
Mr Speaker, I am pleased to inform you that, financing has been finalised for the construction of a new sugar processing plant in Komenda in the Central Region. This would reduce our importation of