Business News of 2014-01-21

Hundreds to lose jobs in textile industry if...

The Textiles, Garment and Leather Employees Union (TEGLEU) of the Ghana Federation of Labour has warned of massive job losses within the local textile industry if government fails to check the incessant smuggling of pirated textile products into the country.
According to the union, the pirated textiles were competing seriously with the locally produced ones because they were smuggled into the market without taxes slapped on them.
A couple of weeks ago, the Ministry of Trade and Industry suspended the operations of a special task force set up to clamp down on traders who dealt in pirated textiles on the local market.
The directive was on grounds that the traders were not directly involved in the smuggling activities rather it was up to the border control officials to ensure that such products did not enter the country.
According to the General Secretary of TEGLEU, Mr Abraham Koomson, since the local industry players were not being supported to survive against the competition of pirated textiles, they would have no option than to lay off workers.
“The workers will continue to demonstrate every day until something is done about this situation,” he said.
The situation has become murky as it is becoming increasingly difficult to check the influx of pirated textiles into the country.
The government is virtually becoming clueless as to what to do to check the canker.
But the reality on the ground is that, a once vibrant industry is fast on the decline and virtually dying. Hundreds of people who constitute an active workforce are becoming idle denying dozens of families who depend on them their daily bread.
In terms of taxes, revenue from the local industry is shrinking particularly at a time when the government is hard pressed for cash to accelerate its development agenda.
Meanwhile, the floodgate seems to have been opened to a few to smuggle into the country what can be produced here to meet the demands of the market.
It is necessary to point out that, nothing stops people from importing goods into the country because Ghana operates a free market economy.
However, the imported textiles are not coming in through the right sources to be taxed and to make matters worse, the prints are pirated. As a result, they are cheaper and the locally printed ones are not able to compete.
Employment numbers
The industry, which once employed about 25,000 workers, now employs less than 4,000 and with no help in sight for the industry, this number is set to see further reduction.
In what he described as condoning of “criminal activities” by those supposed to protect the local industry, Mr Koomson chided the Trade Ministry for deciding to suspend the operations of the taskforce which would adversely affect the already ailing industry.
Mr Koomson further explained that the recent increase in Value Added Tax should not be the case but instead efforts must be made to widen the tax net to cover those traders who smuggled textiles into the country.
“Instead of expanding the tax net, you are rather increasing the tax for those doing their daily businesses including these textile companies who are already suffering. They will have no option than to sack workers because there will be nothing for them to do,” he said.
President’s media encounter
During a media encounter with senior journalists on January 7, the President, Mr John Dramani Mahama sought to justify why the task force had to be suspended saying the operations of the taskforce in the markets were misplaced as poor/innocent traders struggling to make their living through petty trading were being unreasonably harassed.
Responding to this assertion, Mr Koomson took a swipe at the Trade and Industry Ministry for misinforming the President about the taskforce and rather described the action as an “endorsement of lawlessness.”
Operations of the task force
To help curb the menace of the huge import of pirated textiles, the Ministry of Trade and Industry set up a task force made up of representatives of the security agencies, Ghana Standards Authority, the local manufacturers and some trade unions.
The task force, whose work was to help rid the market of these substandard goods, made some inroads although the issue of influx of pirated textiles still lingered on with no solution in sight for the local textile industry which was almost on the verge of extinction.
For instance, in October 2010, the task force set up by MoTI seized and destroyed 400 pieces of pirated textiles worth GH¢20,000.
Again, in August 2011, about 580 pieces of pirated textiles were confiscated from traders in various markets across the country and destroyed at the Kpone Landfill site, in Tema by the task force.
Similar exercises also took place in 2012 and in December 2013, 1,035 pieces were confiscated until the subsequent suspension of the operations of the task force earlier this year.
Approved route for textile import
The Ministry of Trade and Industry, in a directive issued last year said with effect from September 2, 2013 all textile imports would be done through three ports.
The Kotoka International Airport (KIA), Takoradi and Tema harbours are now designated routes for the textiles which in the past had been restricted only to the Takoradi Harbour.
This was in a bid to control the smuggling of pirated textiles onto the Ghanaian market.
But in spite of the directive, checks by the task force, he explained, showed that about 99 per cent of the substandard goods did not pass through any of the three entry points and officers at the borders told them (task force) that they did not see those goods.
Cash-cow for traders
Meanwhile, traders at the local market are doing brisk business in pirated textiles following the suspension of the operations of the task force.
The pirated textiles, which sell much cheaper compared to those produced locally, have become the preserve of both traders and patrons despite being aware that they have been pirated.
Source: Graphic Business
« Previous | Next »
View Comments
Sponsor Links
News Categories
Site Menu