By Agbesi BCIL
31st August, 2021

Ghana is a West African country that got its independence in 1957 and became a republic in 1960. Ever since the country’s GDP and per capita have been on the ascendancy averagely. For instance, Ghana’s GDP increased from $189.71billion in 2018 to $204.81billion in 2019. This is as a result of the sprung up of many indigenous businesses, industries, and manufacturing companies which have contributed to the country’s GDP over the years. Thus, the essence of the presence of these businesses, industries, and companies and their contribution to our GDP cannot be undermined. Unfortunately, these businesses, industries, and companies have either been forced out of business, making infinitesimal profits, or running at a loss. This is as a result of fierce competition these infant companies and businesses face from foreign companies who have established their presence in our country coupled with the dire taste of Ghanaians for foreign products and services. The worse of all is that these expatriate businesses remit their profit each year which also puts pressure on our currency.
Protectionism is a theory of practice where a country buffers its domestic industries and businesses by restricting imports (which will hinder the growth of the indigenous industries). This is mainly achieved through the imposition of the tax, tariffs, and other restrictions on imports. One other way of protectionism is also achieved by restricting the engagement in some businesses to only citizens. This theory was mainly propounded and pushed by the mercantilists who believed that the power of a nation lies in its wealth. They also proposed that there should be restrictions on imports while a country forms allies (which it will export to). According to them, the more wealth a country accumulates, the more power it has. Protectionism mostly supports the infant industries which cannot face competition from the international community in terms of technology, skills, etc. to expand rapidly. In Ghana, there have been several efforts from successive governments to protect some businesses. For example, the laws of Ghana bars foreigners from engaging in the retail business. There have also been calls from many organizations and individuals for government to implement more protectionism measures to support some of its fast-growing industries. One of such groups as the Association of Ghana Industries (AGI) which called on the Government in 2015 to strengthen its restrictions. The government will find it easy to implement protectionism when it is able to identify the businesses, manufacturing companies, and industries that need protectionism measures. This write-up aims at highlighting some of the businesses and manufacturing companies that may need protectionism and why they need it.
Firstly, one of the industries that need protectionism is the cement industry. Ghana is one of the African countries manufacturing cement at commercial levels. With the rapid growth in the construction industry, Ghana’s cement has also expanded proportionately. The local industry has a capacity of about 7.4 million tons of cement every year with an annual consumption of about 5 million tons. Some of the indigenous cement manufacturing companies in Ghana include Diamond Cement Ghana Limited, Savannah cement, Ghana Cement (GHACEM), etc. Because of competition from other foreign cement manufacturing industries, they don’t have the space to operate. They have to fight for customers with the imported cement. For instance, Dangote cement, a leading producer of cement in Africa, established its plant in Ghana in 2011 but has since imported and bagged cement. In my opinion, since the annual consumption is 5 million tons and the indigenous cement companies even have an annual excess capacity of about 2.4 million tons and they as well provide employment for many Ghanaians, it would be one lucrative sector for government to implement protectionism measures.
Secondly, the textile industry is also one of the industries that need protectionism. The emergence of the weaving of beautiful Ghanaian Kente has helped to reshape and project our culture to the rest of the world. Ghana has also got the Ghana Textile Print (GTP), Akosombo Textile Limited (ATL), Ghana Textile Manufacturing Company, and Printex, which have faced low market due to the influx of pirate textiles each year. If this company and industry are protected by restricting as well as imposing high tariffs and embargo on these pirate textiles that enter the country, the industry will grow and expand given that they will have a higher market as compared to what they are having now. In some cases, the GTP has to close operations because of a loss of revenue due to low sales. So, protectionism is truly needed in this sector to even protect the brand of textiles produced by these textile manufacturing companies.
The last but not least sector worth mentioning is the rice farming sector. Ghana has emerged as one of the top producers of rice with production areas spread across the country. For example, in 2017, Ghana was producing a total of about a 1.02million metric tons of rice. Rice has also become the second most important food staple after maize in Ghana. However, the daily consumption of foreign rice due to its fragrance and polished nature has dented the production and sale of the local rice. According to the Ministry of Food and Agriculture (MoFA), the country’s imports had significantly increased from US$ 152million in 2007 to US$ 1.2billion in 2015. In December last year, the president in his speech encouraged Ghanaians to buy and eat the local rice during the festive season. Some media houses also took the initiative to promote the local rice. I think these actions should be followed by the protectionism initiatives which will halt the importation of rice to enable the sector to operate. Considering the fact that in 2018, the rice production sector employed about 32,400 directly and 194,400 indirectly, the protectionism of this sector will give employment to many Ghanaians who will otherwise be unemployed because of lack of market and heavy importation. This will also contribute immensely to the GDP of Ghana through expansion. The government will also get some revenue from savings gotten from not importing rice. Another reason why this sector needs protectionism is the healthy nature of the rice produced in Ghana; most imported rice has preserving chemicals that may not be healthy for consumption.
In conclusion, there are other numerous businesses, manufacturing companies, and industries that may need protectionism but the write-up focused on the aforementioned ones. Protectionism is good because it helps infant sectors, businesses, and manufacturing companies to expand and establish strong grounds to compete in the international community. However, protectionism may not be best due to: the limit of the domestic market thereby hindering the companies of large-scale production and technical change, producers having a dominant position, and consumers having absolutely no choice between domestic and foreign products. This may make these companies far from catching up with the industrial nations, and thereby falling further behind in terms of productivity levels. I think the government should therefore implement protectionism as a temporary measure to allow these companies to grow after which they should be opened up to the international community for competition.
 
Bibliography
Corporate Finance Institute. (n.d.). Retrieved May 13, 2020, from Corporate Finance Institute web site: corporatfinanceinstitute.com/resources/knowledge/economics/protectionism
Essabra-Mensah, E. (2018, June 10). Ghanaweb. Retrieved from GhanaWeb website: www.ghanaweb.com/GhanaHomePage/features/A-glance-at-local-rice-production-661447
Ghanainsider. (n.d.). Retrieved May 12, 2020, from https:/ghanainsider.com/cement-companies/#
Plecher, H. (2020, May 5). Statista 2020. Retrieved from Statista: www.statista.com/statistics/447486/gross-domestic-product-gdp-in-ghana

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