Informal cross-border trade a major obstacle to Ghana’s economy – Analyst

Economic Analyst Emmanuel Boateng has warned that informal cross-border trade is a significant obstacle to Ghana’s economic stability, revealing that the country loses around GHS 7,000 million in revenue every quarter due to unregulated trade activities.

Speaking on the Business Breakfast programme on Zed 101.9 FM, Mr Boateng explained that Ghana is currently under the International Monetary Fund (IMF) programme, which imposes strict revenue targets.

However, the Finance Ministry continues to struggle to meet these goals, largely because of substantial revenue losses caused by informal trade along Ghana’s borders.

“The government is losing substantial customs duty and other trade revenues to informal cross-border trade,” Mr Boateng stated, emphasising the serious impact on national finances.

He further noted that informal trade is not accounted for in Ghana’s official balance of payments statistics, resulting in incomplete data that hinders accurate foreign exchange demand estimates and weakens policy formulation.

This gap, according to Mr Boateng, also undermines investor confidence in the Ghanaian economy.

“Our balance of payments statistics are very incomplete. The Bank of Ghana reports trade deficits and foreign exchange needs based on formal trade data, but the fourth quarter informal cross-border trade reveals a trade deficit with Togo alone of about GHS 539 million. None of this is captured in the official balance of payments account.

“As a result, it negatively affects our foreign exchange demand calculations and overall economic planning,” he said.

Mr Boateng also emphasised the urgent need for comprehensive data collection and policy interventions to curb the informal trade sector and safeguard the Ghanaian economy.