The Association of Ghana Industries (AGI) has once again brought to the forefront the need for targeted and deliberate policies to scale up Ghana’s industrialisation efforts.
Speaking at the 64th Annual General Meeting (AGM) of AGI held at the Accra International Conference Centre (AICC), Dr. Humphrey Ayim Darke, President of AGI, emphasized the urgency of implementing policies that support industrial growth and development. He asserted that the existing industrialisation drive appears stagnant, highlighting the need for a strategic overhaul of past initiatives.
Dr. Ayim Darke noted that the path towards industrialisation in Ghana has been riddled with numerous challenges, often leaving the country reliant on imports for goods that can be locally produced.
According to him, “Ghana’s industrialisation drive over the years seemed to have stuck in the mud,” stressing that it is imperative to “re-examine the policies and strategies deployed in the past.” He stated that achieving significant industrial progress would require deliberate and well-thought-out policies that address these long-standing issues.
Strengthening Local Value Chains
A critical part of AGI’s call to action is the development of local value chains that can sustain the industrial sector. The AGI President emphasized the need to bolster the local value chains to feed industries, reducing the reliance on imports. He believes that focusing on the growth pillars of the economy can generate a multiplier effect, significantly boosting the country’s industrial capacity.
The influx of imports, including electrical cables, wheat flour, beverages, vegetable cooking oil, and foam mattresses, has undermined local production efforts. Dr. Ayim Darke pointed out that these imports often bypass quality checks, leading to unfair competition against local manufacturers. He referenced a joint operation by AGI and the Ghana Standards Authority, which successfully closed down production sites of sub-standard foam mattresses.
“These practices require a 24/7 monitoring system,” Dr. Ayim Darke stated. “Until there is sustained surveillance of Ghana’s borders and vigilance by the Ghana Revenue Authority (GRA), the unfair practices will continue to fester.” The AGI President’s remarks highlight the critical need for stringent enforcement of regulations and quality standards at Ghana’s borders to protect local industries.
Policy Concerns and Regulatory Challenges
While acknowledging the government’s efforts to support local industries through initiatives such as the VAT waiver on locally produced textiles and the VAT exemption on locally manufactured sanitary pads, the AGI President raised concerns about certain regulatory challenges. He specifically addressed the introduction of the Emissions Levy Act, 2023 (Act 1112), noting that its implementation without clear guidelines has caused uncertainty among local manufacturers.
“Although AGI is in support of sustainable environmental management, eco-friendly technology, and green energy, the announcement of the Emissions Levy Act, 2023, without clear guidelines unsettled the local industries,” Dr. Ayim Darke remarked. His comments underscore the need for clarity and consistency in policy implementation to avoid disrupting the operations of local businesses.
Despite the challenges, the AGI President praised the government for certain positive measures that have benefitted local industries. He commended the upfront VAT relief and the in-bond manufacturing dispensation, which grants a duty deferment on imported raw materials.
“While the VAT waiver on locally produced textiles remains in force, the waiver of VAT on locally manufactured sanitary pads took effect this year to make the sector competitive. This has huge cash flow implications, and I commend the government and GRA for heeding our call.”
Dr. Ayim Darke
The collaboration between AGI and government entities has been pivotal in addressing some of the immediate needs of the industrial sector. Mr. Edward Apenteng Gyamerah, Commissioner of the Domestic Tax Revenue Division of the GRA, also spoke at the event, urging industry players to distinguish between policy issues and tax matters. He emphasized the importance of businesses engaging directly with the GRA to address their specific tax concerns and avoid unnecessary disputes.
Meanwhile, AGI is poised to intensify its advocacy efforts to ensure that the voice of industry players is heard and their concerns addressed. Mr. Seth Twum-Akwaboah, Chief Executive Officer of AGI, highlighted plans to strengthen the association’s advocacy role and enhance the provision of business development services for its members. “We remain committed to advocating for policies and reliefs to tame the economic headwinds that we face,” Mr. Twum-Akwaboah stated. “We have engaged the government on several fronts throughout the year, particularly on taxes, forex issues, influx of imports, and unfair practices, among others.”
The emphasis on advocacy and business support reflects AGI’s dedication to creating a more conducive environment for local industries to thrive. The association’s strategic priorities align with the broader objective of transforming Ghana’s industrial landscape and reducing dependency on imports.
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