EXPORT-LED DEVELOPMENT IS A PROBLEM

Edward Kareweh

By Duke Tagoe

Edward Kareweh, Deputy General Secretary of the General Agricultural Workers Union of the Trades Union Congress (TUC) has called on the Government to move away from the export led development mindset. That mindset, he said, is as an ideological orientation which retards progress.

Pointing to a major flaw in government policy, he explained that our continuing support for every production that leads to export of raw materials reinforces our dependency because we do not produce what we consume at home.

“To use state resources to meet the taste of foreign consumers and further the development needs of external people is detrimental to the national interest and runs contrary to the principles that underline nation building.

Edward Kareweh was speaking at a workshop organized to evaluate the benefit of the Export Trade, Agricultural and Industrial Development Fund (EDAIF) for small holder farmers in the Brong Ahafo, Greater Accra and the Northern Regions.

The Export Development and Investment Fund (EDIF) currently the Export Trade, Agricultural and Industrial Development Fund (EDAIF) was established by the Export Development and Investment Fund Act, 2000 (Act 582), and it became operational in 2001 as an agency of the Ministry of Trade and Industry.

The act was, however, amended in 2001 by the Export Development and Investment Fund (Amendment) Act, 2011 (Act 823), to expand the scope of application of the fund to include the development and promotion of agro-processing industry, hence the change of the name of the fund to EDAIF.

EDAIF operates by handing over money to designated financial instructions or banks like Stanchart, Stanbic and the ADB. These banks then evaluate prospective applicants to find out about their financial viability before they get the funding. The challenge for many farmers is that they need to write proposals which are assessed to find out if they meet the criteria. This presents a challenge for most farmers who cannot read nor write good proposals.

In spite of the concerns raised, Micheal Awuku, a top official at the EDAIF Secretariat says export oriented development is the bulwark of the economic policy of the Government of Ghana  adding that the main thrust of Government's foreign trade policy has been the endorsement of Private Sector led export development. He said the policy would offer the country substantial increase in foreign exchange receipts and appreciable opportunity for growth but Ben Kanati, a rice farmer from Ashaiman disagrees.

According to him funding that encourages the production of cash crops for foreign markets does not benefit small holders who produce local and indigenous crops to feed the majority of the Ghanaian people. “That attitude deprives local farmers of the needed revenue to expand and grow more to meet the local market. On the other hand pressure builds for lower tariffs for already highly subsidised imported goods which in turn affect government’s tax revenue. When that happens, it constrains government space and we end up going to borrow from IMF and the World Bank with attendant negative social consequences.

The primary source of funding for the EDAIF fund is money realized from the divestiture of state enterprises.

Madam Victoria Adongo, Programmes Officer of the Peasant Farmers Association of Ghana says small farmers also want to go commercial by expanding not for export but to meet the increasing demand for the local market. According to her, a halt in the import of frozen chicken and support to the local poultry industry will also benefit maize and soya farmers because they provide quality feed for the poultry industry. 

In his contribution to the discussion, Kweku Boateng, a vegetable farmer explained that South Africa has the biggest vegetable market in the world because the government set up councils to support farmers. According to him, vegetable farmers in Johannesburg for instance send their produce to the Johannesberg Food Council who buys them and sell on the local market. Cocoyam, potato and cassava farmers have grades which determine the prices of their produce.

Mr Boateng is calling on EDAIF to use the money in their possession to build infrastructure and make markets available for farmers to sell the product of their labour, make money and thereby remove the over reliance on grant and credit facilities.