The government and people of Ghana are currently battling two hydra-headed financial demons called inflation and depreciation (of the currency), and journalist Ken Kuranchie has proposed to the government to stop studying the twin demons as financial and economic problems, but rather consider them as the consequences of under-productivity, particularly in agriculture and industry.
Mr. Kuranchie, who operates a garden made of sacks at his residence, has therefore proposed that the government put in place a focused approach to boost agricultural production across all the regions of Ghana and across all crops, and secondly, promote inner-city farms similar to ‘Operation Feed Yourself’ practiced by Ghana over forty years ago. He said that he chose agriculture as the area of first focus because it is relatively easier to tackle and achieve results, whilst the industry has the penchant to follow high productivity and availability of raw materials.
Giving the rationale for his suggestion, Mr. Kuranchie stated that the rate of inflation in Ghana should not be seen as a malaise (or sickness), but should be seen as a symptom or sign of the malaise or sickness.
“The rate of inflation should be seen as a temperature reading for a sick patient. The high temperature is not the sickness. It is a sign of the underlying sickness, and until and unless this underlying condition is identified and tackled, the problem would persist. Trying to deal with inflation and depreciation of the currency directly without addressing the underlying problem would be like given a malaria patient paracetamol to reduce the temperature without addressing the underlying malaria. You the doctor may be in the actual position of putting the life of the patient in danger,” he said.
He identified the real cause of the inflation as under-productivity in critical sectors, particularly agriculture and industry.
“We are not producing enough to feed ourselves and to meet all our other needs. So we import almost everything, including our current basic staple, rice. In rural areas, where food is produced, the cost is relatively high. The land is under-used and under-productive. Our farmers remain persistently peasant and shun technology. That must change. We have the means to turn this situation around in the very nearest term,” he said.
“The more of our needs that we produce here, the lower would be the inflationary pressures in the system. And the natural place to start is agriculture, where we are at a natural advantage,” he added.
The second leg of his proposition, is that government immediately begin a mass education on the need for people to begin inner-city farms, or even gardens.
“People who have land to spare should begin growing economic crops. If you do not have land, gather sand in sacks or pots or bottles and plant something. Start today. If a million people living in Accra had plants that gave forth fruit, few would complain about high prices,” he said.
He repeated that the same formula would help to reduce the rate of depreciation of the currency.
“Our currency is not underpinned by productivity in the relevant sectors. Therefore people change the currency for currency that is able to operate in economies that produce relevant things. You cannot use the Cedi in the United States or Europe or Thailand or China to buy the things you use here. So people change the Cedi to currency they can use in these countries to buy the things they need or believe they need. The only way to save the currency, is by putting in place measures that boost productivity in relevant areas here. Importers who travel to the Far East to buy rice, thereby putting pressure on the Cedi, would be forced to buy the rice here if prices and the quality here were comparative or better than in the Far East. I believe that this is achievable, at minimal cost,” he stated.
He called on government to stop misidentifying the causative factors behind the inflationary pressures and the depreciation of the Cedi. He said that such misdiagnosis focused on leaving the problem with the Bank of Ghana and the Ministry of Finance, the so-called economic managers, when the real causes of the inflation and depreciation of the currency lay elsewhere.
“No financial wizard is going to be able to save a currency that is not underpinned by productivity. Our currency operates in a milieu where production of everything including agriculture produce is very low and industry is nothing to write home about. We constantly put pressure on the Cedi in exchange for other currencies. Indeed, even if we pour in ten billion dollars today, the cumulative effect would be that we would be back with the same situation in a few years, if not a few months. The solution is not in finding new loans or more forex to shore up the Cedi. The solution is in boosting agriculture and local industry and thereby creating value in the milieu of the Cedi.
“A wrong diagnosis is costly, and tackling the problem in isolation to other sectors of the economy is fatal. Persistently failing to identify the problem, and thence the solution, would only lead to more suffering for the patient, and the people,” he said.
