Say NO to Protectionism, Dr. Kwesi Nduom!

Dr. Kwesi Nduom, former presidential candidate of Ghana’s socialist
party, the Convention People’s Party (CPP), and now “Shadow
Finance Minister” in the newly created CPP think tank, pledged to
Ghanaians this morning on TV3,a private Ghanaian television
station that he will “bring Ghana’s [wandering] economy home”, by
having the state support the private sector, decentralise economic
decision to regions and districts, all very noble ideas, but sadly, he
also wants the state to impose heavy tariffs on imports Ghana can’t
even compete with, as if the current ones are business and
consumer friendly.

Ndoum is not the only one to hold this view. There are many think
tanks and activist organisations here in Ghana and across Africa
who share the view that Africa’s rice, tomato, and poultry farmers
need to be protected from cheap imports. Yet the problems of
African farmers lie elsewhere: they and other entrepreneurs are
stifled by punitive tax regimes and the high cost of capital, not to
mention our disarrayed land tenure systems which lead to low crop
production.

Seems to me, creating local champions is fine, but not at all cost,
when the local costs outweigh international ones? Not even for
patriotic reasons else we will end up with the likes of the defunct
Ghanaian carrier ,Ghana Airways- whose oversight employs more
cooks and crooks than pilots, with a single but usually faulty aircraft
that occasionally spins its passengers in the air with careless
abandon, whilst maintaining its political status as “strategic national
asset”.

Arguably, the main reason the likes of Dr. Nduom support
protectionism is the very offensive farm subsidies in western
countries, whose abolition would indeed help to achieve a level
playing field for agricultural producers around the world. Yet this
view is rife with hypocrisy: the same organisations and activists
promote subsidies (what they call “fair trade”) for farmers and
businesses in poor countries to shield them from the effects of
competition.

If we in Ghana did ban rice, poultry and tomato imports, just how
would we feed ourselves? Ghanaians depend on rice as a major
staple in our diets, yet local production caters for only 30 percent of
the rice we consume, partly due to higher costs of production, poor
storage and transport facilities.

But the real problem is not “rigged” trade rules. The problem lies
with us as Africans and especially our leaders, to improve our own
wellbeing, and to encourage economic growth through political and
institutional reforms. Intra-African trade is less than 10%- still a pale
shadow of the numerous trade treaties signed in almost all the
regional economic blocs.

The solution to all that ails us is not protectionism, not even aid,
debt relief or “fair trade”. It is to adopt institutions to harness the
entrepreneurial spirit that exists in every African country, to enable
Africans to trade with each other and anyone else in the world.

Establishing property rights would be an important first step; an
effective, transparent and accountable legal system is another.
Combined with respect for private property and the rule of law,
LOWER TAXES and decentralised decision making, these broad
reforms would encourage entrepreneurship, trade, innovation and
even environmental protection because they empower people –
rather than politicians.

Franklin Cudjoe is Executive Director of IMANI, a Ghanaian think
tank adjudged the 5th most influential in Africa by the Foreign Policy
Magazine and Editor of AfricanLiberty.org.

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