In view of the trade war between the world’s two largest economies; US and China, the US President, Donald Trump has ordered the US to impose tariffs on Chinese imports of 25%, worth $34bn (£25.7bn) effective last week.
Trump has already imposed tariffs on imported washing machines and solar panels, and started charging levies on the imports of steel and aluminum from the European Union, Mexico and Canada.
The American tariffs are the result of President Donald Trump’s bid to protect the US jobs and stop “unfair transfers of America technology and intellectual property to China”. While China has also retaliated and vowed to fight back to protect its economy by imposing a similar 25% tariff on 545 US products, also worth a total of $34bn.
Although the tariff affects global trade and GDP, it in turns to protect and generate revenue for each respective country so far as the economy is concerned.
Enough of the trade war between the two largest economies. Now, let’s come back to Ghana. As it stands now, Ghana’s Inflation Rate is 9.8 percent as at May, 2018 from 9.6 percent in April, which was the smallest rate in since December 2012, as prices advanced faster mainly for food and fuel. Not to talk of the GDP annual Growth Rate in Ghana averaged 6.95 percent from 2000 until 2018. This is alarming.
Ghana can pick up few lessons from US-China trade war to solve the depreciation of the Cedi which will not only affect the economy positively, but also business importers in trading for goods with the Cedi to the US Dollar.
The minority even claims the depreciation of the Cedi might affect the IMF deal.
Business and Financial mogul, Dr. Papa Kwesi Nduom says in order to prevent a further depreciation of the Cedi, Ghanaians must consume locally produced goods, addressing the issue at the 25th anniversary launch of his investment company Good Coast Holding, Founder and President of Groups Nduom said the frequent importation of foreign products only puts pressure on the Cedi.
Ghana should learn from US-China trade war positively to protect its own economy and restore the Cedi. Ghana can also increase tariffs on imported goods if those same imported goods cannot be banned in the country.
Also, locally manufactured products should be encouraged in order to stabilize the economy to regain the depreciation of the Cedi.
Hence, government together with policy and economic experts, stakeholders, and other abled body should amicably come on board to solve this menace on the depreciation of the Cedi so far as Ghana as a developing country is concerned.
By Prince Schroeder
