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Business News Tue, 11 Jan 2022

AGI urges government not to rescind reversal of benchmark values

The Association of Ghana Industries (AGI) has urged the government to remain focused in its Industrial Transformation Agenda and unwavering in its decision to implement the reversal of the benchmark discount policy.

The AGI urged the government to backtrack on the reversal of the benchmark policy.

Their call comes after President Nana Addo Dankwa Akufo-Addo ordered the suspension of the reversal of the benchmark policy.

This was is to allow for further consultations.

The president’s order was after the Finance Ministry had agreed to further engagement on the discounted benchmark reversal after a crucial meeting with other stakeholders.

The meeting on Thursday, January 6 was attended by Finance Minister Ken Ofori Atta, trade union leaders, Customs and the Ghana Revenue Authority (GRA) to conclude on what was termed” satisfactory values for importation”.

The reversal was to affect 143 items under three categories prescribed by the Ghana Revenue Authority.

The benchmark value, which is the amount taxable on imports, was reduced by 50 percent for some goods. The government had hoped that this was going scale up the volume of transactions of make Ghana’s ports competitive.

The government decided to reverse this decision after it met opposition from the Association of Ghana Industries and the Ghana Union of Traders Association (GUTA).

But it met opposition from trade unions including the Ghana Union of Traders Association (GUTA) and Importers and Exporters Association of Ghana (IEAG).

The AGI in a statement on Monday January 10 said “While a number of countries offer export rebates to their firms to develop export trade, Ghana’s benchmark discount policy offers universal import rebate that only promotes importation and this policy distorts our micro and macro-economic fundamentals. Indeed, nothing explains the creation of sustainable jobs and economic emancipation better than the right industrial policy decisions and that deliberate effort to industrialize.

“Guided by the overarching framework of Ghana’s industrial transformation agenda, 1D1F initiatives, Planting for Food and Jobs, Fertilizer subsidy and Ghana’s export development agenda, the AGI believes the benchmark discount policy in its current form runs counter to Government’s own agenda to industrialize. To mention a few, we have seen the Government commission the Savelugu rice factory in August and Sefwi Akontombra rice factory in September just last year. These two recent investments totalling about Ghs14 million risk becoming redundant if such large rice imports persist. Investor confidence is waning, and no investor would like to invest in a real sector that is currently exposed to the influx of imports as we have.

“Industrialization is so central to Ghana’s economic liberation that, we cannot afford to sacrifice our industrial initiatives for such short-term gains that serve the interest of few importers. This policy is very regressive and will be most unfortunate if maintained in its current form. We wish to emphasize that it is the sustainable jobs that will give economic empowerment and generate domestic revenue.

“The exigencies of local manufacturing became more prominent with the outbreak of the covid-19 pandemic. With the disruption of global supply chains, high cost of raw materials and freight during the pandemic, we all saw the need to quickly scale up the development of our local supply chains. Today, we are all complaining of the rising cost of freight. But the more dependent we are on imports, the more likely we are to bear the brunt of such high freight costs and the reverse holds true.

“AGI supports economic cooperation and multilateral trade, the reason why Ghana has signed a number of trade agreements.

But we also note that signing of trade agreements such as AfCFTA and the interim Economic Partnership Agreement (iEPA), alone will not guarantee the gains we desire. These will only be meaningful if we build local production capacity to create jobs and export.

“AGI supports the application of the policy to selected items of national priority only. It is important for Government to cushion local products for which there is local production capacity. Secondly, we urge Government to maintain the benchmark policy for manufacturers to help grow the real economy. Manufacturers are finding it difficult to retain their employees, with such an influx of imports at cheap prices displacing their products on the market.

“The benchmark discount policy in its current form could worsen the unemployment situation. The future of our country and our youth should guide us in our quest to promote policies that spur economic growth, industrialization and sustainable job creation.

We welcome stakeholder dialogue on the benchmark discount within the context of what is best for our country. We do understand why some of our importers and traders are unable to broach the topic of industrialization. Indeed, industrialization is a difficult path in doing business. It may sound long-term and possibly deprive some businesses of short-term gains. But we all need to make sacrifices for our country to develop and that is the reality. Our sacrifices will eventually pay off.

We seize this opportunity to make a clarion call on all well-meaning persons and groups including the TUC, ICU, GNCCI, and GUTA to support this worthy cause of the reversal of this benchmark discount policy in our national interest.”
Source: 3news.com