Why still import what we can produce?

By Collins Ofoe KWASHIE

In today’s globalized economy, many developing nations stand at a defining crossroads: should they focus on producing what they consume, or continue depending on imports to meet domestic demand?

For Ghana—and much of Sub-Saharan Africa—this is more than an economic debate; it is a matter of long-term survival and prosperity.

Our country, like many others in the region, has for decades leaned toward a commercially import-led model.

While this may offer short-term affordability and access to a wide variety of goods, the long-term costs are mounting joblessness, trade deficits, deindustrialization, and a Idangerous over-reliance on volatile global markets.

It is time for Ghana to boldly pivot toward a production-led economy.

Understanding the Two Paths

In a production-led economy, growth is driven by local manufacturing, agriculture, and value-added services. Countries like China, Vietnam, and Poland have used this model to create jobs, raise incomes, and build resilient economies. China, for instance, accounted for nearly 29% of global manufacturing output in 2023, and continues to lead in exports and industrial innovation. Take Poland, a mid-sized European economy, generates 30% of its GDP from exports—mostly manufactured goods.

In contrast, an import-led economy relies on bringing in finished products from abroad. Retail and service sectors dominate, while local production takes a back seat. The result? Trade imbalances, limited job creation, and fragile supply chains that crumble under external shocks. Additionally, the country risk being inundated with inferior and/or cheap unwholesome products and is likely to be impacted adversely by imported inflation.

Ghana’s Economic Profile

Sectorial GDP estimated shows the services sector continues to be the largest sector of the Ghanaian economy in Q1 2025 with a share of 46.8 percent of GDP at basic prices. The GDP shares of Industry and Agriculture were 29.7 percent and 23.5 percent, respectively.

Quarter-on-quarter seasonally adjusted GDP growth, saw the Agriculture sector recorded the highest growth of 1.7 percent, followed by the Services sector at 1.5 percent, whilst the Industry sector recorded a growth rate of 0.9 percent.

The consequences are becoming painfully clear. Ghana’s dependency on imported food, fuel, and consumer goods has made it acutely vulnerable to global disruptions. The ripple effects of the Russia-Ukraine war—fuel inflation, food insecurity, and currency pressure—were harsh reminders of this fragility.

Why Production Must Lead

Moving toward a production-led model offers five key advantages:

Economic Resilience: Countries that produce locally are less exposed to global shocks. When borders close or supply chains break, they can still feed, fuel, and finance themselves.

Job Creation: Manufacturing and agriculture create wide-ranging employment—from factory workers and engineers to farmers and logistics operators. In a country with high youth unemployment, this is essential.

Export Growth: Producing for export adds value, earns foreign exchange, and improves trade balances. It’s more sustainable than relying on raw commodity exports or re-exporting imported goods.

Technology and Innovation: A production-driven economy fosters skills development, research, and technological advancement—all vital for global competitiveness.

Economic Sovereignty: Reducing dependence on foreign goods strengthens national autonomy and shields the economy from external manipulation or crises.

The Dangers of Remaining Import-Dependent

By contrast, the import-led path carries growing risks:

• Trade Deficits: Ghana routinely imports more than it exports, leading to debt accumulation and currency depreciation. Though Ghana recorded trade surplus (44.7 billion cedis) in 2024, food imports specifically, grains, animals or vegetables, fats and oils, cereals, meat, sugar products and fish collectively constitute over half (53.6%) of all food imports into Ghana, reflecting a significant portion of the country’s food imports. Food imports rose by GH₵12.2 billion, between 2023 and 2024.

(2024 GSS Trade Report)

• Deindustrialization: Cheap imports often undercut local producers, stifling industrial growth and innovation.
• Jobless Growth: While trade boosts GDP on paper, it doesn’t always translate to real jobs or livelihoods.
• External Vulnerability: Our economy remains exposed to fluctuations in global prices, currency swings, and geopolitical tensions.

A Balanced Transition

This is not an argument for isolationism. Ghana must continue to engage in global trade—but trade should serve as a tool for building local capacity, not a substitute for it. The goal is to transform imports into steppingstones for industrial learning, while growing our domestic base.

To do this, we must:

• Implement strategic import substitution policies
• Expand infrastructure and energy to support production
• Improve access to finance for local SMEs and manufacturers
• Reform education and vocational training for industry needs
• Encourage public-private partnerships to drive investment and innovation

Conclusion

The choice between a production-led and an import-led economy is ultimately a choice between economic independence and continued vulnerability. Ghana cannot afford to remain a passive consumer of other nations’ productivity. It is time we invested in ourselves—our people, our industries, and our future.

A production-led economy is not just a strategy—it is a necessity. If we are serious about job creation, resilient growth, and national development, then the answer is clear: we must build at home.

The Writer is a Banker

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