Chief Executive Officer of the Association of Ghana Industries (AGI), Seth Twum Akwaboah, has disclosed that the Association does not support the total reduction of all products in the benchmark value.
According to him, the reduction directly translates into imported products being cheaper to the detriment of local products. This, he explained influences consumers to be more inclined to purchase cheaper imported products.
His comments follow GUTA’s assertion that, the Association is lobbying government to scrap the 50% benchmark value.
“I think that right from the very onset when the benchmark value mark was introduced, AGI’S position has been very clear and our position has never changed.
“When you reduce the value of the benchmark like that, what it means is that, the imports are becoming cheaper; the duty that they have to pay is becoming cheaper. We have not in any way said that, it should not be applied on any particular good. What we have said is that, products that we have local capacity to produce, we should protect local industries. For product that we don’t have local capacity to produce, in order to cushion consumers, there’s nothing wrong [with] government reducing the benchmark values. The reason is that, when you do so, you make the imports cheaper and when the import becomes cheaper, local production becomes more expensive. Naturally, when the consumer goes to the market, he’s going to buy the product with the cheapest price and therefore putting industries out of business”.
Local manufacturers likely to struggle
Commenting on the subsidies enjoyed by imported products, Mr. Twum Akwaboah intimated that, these products are already enjoying some rebates from government. As a result, local companies will not be able to compete within such space.
“Let’s bear in mind that some of these imports that comes into our country, they have export rebates already. Some of them are highly subsidized from the countries of origin. Therefore, if you further reduce the value like that, then you’re making them so cheap. Therefore, the local companies cannot compete. Bear in mind that this is a national agenda we are pursuin; if you don’t do that, local industries employ more people than traders. It is not a fight between traders and manufacturers.
“The value chain is such that, if you have industries without traders, your goods cant get to the final consumer”.
Benchmark value introduced to solve problem
Reacting to this, the President of GUTA, Dr. Joseph Obeng averred that, government introduced the benchmark policy to solve a problem.
According to him, businesses have been complaining about the rate of duties as it was becoming unbearable and unaffordable.
“So, government listened to our plight. In spite of the fact that they had a problem with the duty reduction itself and they introduced the benchmark reduction of 50%, it means that, when we bring our goods, they will divide the invoice value by 50% and then we pay the duty. Cumulatively, normally we pay around fifty to sixty five percent of duty.
“AGI is saying that they cannot operate… because of the introduction of this policy, which we find it difficult to understand. In spite of the numerous concessions that government have been giving to AGI, they pay zero percent to five percent maximum on the values of their raw materials.
“They have all the advantages, the concessions that government has given them and yet, they don’t want us to also enjoy the little support that government is giving us for us to remain in business”.
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