The lack of a post-Brexit trade agreement between Ghana and United Kingdom (UK) has negatively affected direct and indirect jobs in the banana sector, needlessly threatening the survival of an otherwise successful industry.
According to Fairtrade Africa (a non-profit umbrella organization of commodity producers), more than 15,000 direct and indirect jobs are currently being affected negatively due to the failure of Ghana and UK to sign a post-Brexit trade agreement that allows Ghanaian fruit producers’ tariff free access to the UK market as exists under the Economic Partnership Agreement (EPA).
Ghana and UK failed to seal a trade agreement before the end of the Brexit transition on 31st December, 2020. This has resulted in the payment of exorbitant tariffs by Ghanaian banana and other fruits and vegetables exporters who are now trading under the Generalized Scheme of Preferences (GSP). Banana exporters who were previously trading under the Economic Partnership Agreement (EPA) with the EU, without payment of tariffs, now have to pay 95GBP tariff per ton of banana.
The Banana Producers’ Association of Ghana, comprising of 3 companies namely: Golden Exotic Limited (GEL), Musahamat Farm Limited and Volta River Estates Limited (VREL), which have been actively exporting bananas for the past 26 years to the EU market risk losing their market to other African exporters who were able to seal a trade agreement with UK before the deadline and therefore are not subject to duty payment. Ghana can therefore not compete with exporters from other origins at the current rate of tariffs.
Speaking on the situation, the Executive Director at the UK-Ghana Chamber of Commerce, Madame Adjoba Kyiamah said Ghana’s failure to secure a deal before the end of 2020, has meant that some fruit and vegetable exporters are now being forced to export with additional tariffs increasing their cost of doing business.
“With the fruit exporters, they are currently still exporting and paying duties that they were not previously paying. So, of course, their cost of doing business has gone up. And so, given the current scenario, it is our hope that an agreement would be signed expeditiously between Ghana and the UK, just so that these companies and the livelihoods of the employees that work for these companies are not impacted.”
Madame Adjoba Kyiamah
According to Fairtrade Africa, Golden Exotics Limited (GEL), which exports around 45,000 tonnes of Fairtrade and organic bananas to the UK each year, had to pay a £17,000 duty on its first post-Brexit shipment to arrive in the UK this year. Ghana’s Volta River Estates Limited (VREL) plantation exports around 9,500 tonnes of Fairtrade-certified bananas to the UK each year for sale at Co-op and Waitrose supermarkets.
“Volta River Estates exports about 85% of its volume to the UK, having developed long term trade relation with the Co-op and Waitrose supermarkets. The company cannot survive this level of tariffs even in the short term, putting the jobs of its 700 direct employees at risk.”
Anthony Blay, Director of Agric, VREL
The resultant effect of the rising cost of business for these companies as a result of these exorbitant tariffs is that some current jobs would be lost, new jobs would not be created and efforts made towards ensuring that producers earn a living income would be thwarted. This situation coupled with the impact of COVID-19 makes the situation even precarious.
Fairtrade Africa, therefore, has called on the UK and Ghanaian governments to immediately sign an agreement to allow tariff-free access to UK Markets. They also request that exporters be compensated for the tariffs already paid as it will be unfair for them to bear the brunt of the two governments delay in finalizing an agreement. Additionally, Fairtrade Africa requests that the government of Ghana involves all key stakeholders especially the producers in the negotiation process and ensure they are fully and speedily informed on the negotiation process. These requests will collectively ensure that jobs are not only protected or secured but that new jobs are created, thereby improving livelihoods.
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