Issues of trade must be approached scientifically—GITFIC

Accra, March 10, GNA-The Ghana International Trade & Finance Conference (GITFiC) has stated that Issues of trade should be approached scientifically with accurate calculations.

Such approaches they believe should include a lot of consultations to arrive at a consensus for the betterment of Ghanaians.

Speaking to the Ghana News Agency on suggestions from some stakeholders that Ghana should trade in the Chinese Yuan, Mr Selasi Koffi Ackom, Chief Executive Officer of GITFIC said trading in the Chinese Yuan at this moment was currently not feasible.

"Serious Economic issues require serious comments and analysis especially at this era. In 2008, the People’s Bank of China (PBOC) renewed some BSAs with some 19 Central Banks including; those of both emerging and industrialised economies.

"This agreement renewal in 2008 amounted to more than 300 billion USD. Some of the main objectives then, according to PBOC, were to promote the use of the RMB in trade and investment. It is very important to note that BSAs, in this regard, are very different from the traditional use as a perceptional arrangement to provide liquidity during financial crisis."

Mr Ackom said in 2015, the People’s Bank of China had signed a Bilateral Currency Swap Agreement with the South African Reserve Bank worth some 30 billion RMB.

The purpose he said was defeated in a long run as the winner had still been the US dollar.

He said Egypt also tried the same and it amounted to nothing as the issue of the US dollar went beyond just import and export.

" The economic determinant factors go beyond import and export. This, we believe, should be underlined."

He said Africa’s largest economy, Nigeria, had in the past and present signed the same agreement with PBOC with the same purpose without meaningful results

"This agreement was first signed in 2018. The two countries agreed to swap up to 15 billion RMB against over 700 billion naira. The winner has, again, been the US dollar. In January 2022, the Nigerian Minister of Finance admonished in a statement that the Nigeria – China Currency Swap deal was not working.

According Mr Ackom, records available the Ghana International Trade & Finance Conference (GITFiC), indicated that between July and December 2018, 13 auctions were conducted and the Renminbi worth CNY669.66m was sold from the drawdown of CNY1bn.

Similarly, he said in its 2019 Activity Report, the apex bank said 26 auctions were conducted and Renminbi worth CNY782.66m was sold in 2019 from the drawdown of CNY1bn.

"The Central Bank of Nigeria also disclosed that it sold 1.45bn yuan since the inception of the currency swap deal with China at the end of 2019.
In a similar report for the first half of 2020, the Central Bank of Nigeria said it sold CNY1.746.40bn from inception to the end of June 2020."

He said even in the sub-region with adequate data available GITFiC, trade volume between China and the 15 countries of the ECOWAS was $34.55bn, a year-on-year decrease of 0.3 percent. China's exports to ECOWAS were $27.61bn, an increase of 1.2 percent; imports from ECOWAS were $6.94bn, at a decrease of 5.8 percent.

"The Ghana International Trade & Finance Conference (GITFiC) is of the view that the Ghanaian Central Bank should not be compelled into entering into such an agreement, especially, at this period of Ghana’s economy.

"We further suggest to the Central Bank of Ghana that the GHS – RMB Cross Border Payment & Settlement Programme should still be shelved until further notice. First steps first. The Chinese Yuan is already trading on the Ghanaian Forex space. Traders can buy the Yuan with cedis and proceed to trade in China and vice versa.

"We call on all well-meaning Ghanaian citizens and the entire business community to trust in Ghana’s current Economic Management Team (EMT)."

He said their abilities and capabilities were solid and able to handle the down-turn of the US dollar - GHS and bring it back to its past glory in the coming months.

"GITFiC has projected good times ahead in our Economic Outlook Projections in January this year and we still stand by that. From where we are positioned, we do know that frantic efforts are underway..

"We further advise our distinguished traders to stay put and advance in their various trading activities on an economic-scientific basis. Ghanaian traders should adapt to new formulas and changes in global trade. In areas that they lack the technical understanding and knowhow, prudent avenues such as the technical teams in our various sector ministries and other private entities are available to help them out."

The GITFiC is a reputed private sector initiative working closely with private sectors and government sectors within the sub-region and the continent at large to drive the Continental Free Trade Agreement (CFTA), broader trade & finance development agenda of the continent, as defined in the A.U’s Agenda 2063, global trade issues, and other trade, trade finance, logistics, and finance agreements.