The Ghana Union Traders Association (GUTA) is calling on the government to review the profit repatriation law to make multinational firms in Ghana repatriate their profits in tranches within the year.
GUTA said the bulk repatriation puts pressure on the Cedi against the major international trading currencies.
According to the Vice President of the GUTA Mr. Clement Boateng, the association has observed that most of the major companies in Ghana are foreign-owned and those companies always send their profits back to their countries which tends to place hardships on the Ghanaian economy.
“If we talk about the telecommunication companies, the oil, and extractive sectors, at the end of the year, they are repatriating their profits back, and you can see the chunk of monies they take from here so the government must look at its investment laws to make repatriation in tranches” Mr. Boateng stated.
He stressed that the cedi depreciation has a very negative impact on businesses because there is always the need to do a top-up to be able to get the same amount of dollars for transactions. When Cedi begins to fall against the major trading currencies, it has a rippling effect on the Naira and CFA as well.
Mr. Boateng who doubles as the Chairman for the Abossey Okai Spare Parts Dealers Association complained to Alfred Ocansey on 3FM Sunrise Morning Show Wednesday, August 10 that a 17% increase of the base rate by the Bank of Ghana implies the commercial banks have to accordingly increase the lending rate and the business borrower will also transfer it to consumers. However, it is the final consumers who bear the additional cost incurred because business people will always protect their profit.”
It has been reported that the Government is planning to inject an amount of $2 billion into the country’s dollar reserves towards stabilizing the exchange rate but the Vice President of GUTA bemoans, that the benefits of this measure could be enjoyed in the last quarter of the year hence the situation will not change immediately.
“Already the Ghanaian consumer is overburdened hence they are not buying and businesses are going down. We are in a dire strait and have to keep squeezing ourselves until the last quarter of the year” he bemoaned.
GUTA also complains that though duties are paid in cedi at the port, it is benchmarked against the dollar and the duty rate is always reviewed every Tuesday and it is always going up because of the depreciation of the cedi.
“Everything that we do is benchmarked on the dollar and we think the government must do something about the situation. The dollarization of the economy must be stopped and the government should find partner banks in China and the other places we import most of our goods from so that importers will pay cedi to the government whereas the government also pays our suppliers through their partner banks overseas. We want the government to also check the activities of the Black Market.” Mr. Boateng appealed.