Business News of Mon, 7 Nov 20161
Industries want subsidies on residential power removed
The Association of Ghana Industries (AGI) has served notice that industries can no longer bear the payment of subsidies on residential power, and therefore want it scrapped in the next tariff review in order not to disadvantage industries.
The AGI President, Mr. James Asare-Adjei, said: “industry is no longer in the position to subsidise residential consumers in the payment of electricity tariffs.” He demanded that subsequent tariff adjustment should remove every subsidy on residential consumers being borne by industry.
He said while industries remain helpless in the current relatively stabilized energy situation with the hope of seeing further improvement, the accompanying electricity tariff is rendering businesses uncompetitive.
The AGI has therefore asked for a reduction of the tariff levels while pointing out that its silence on the matter should not be seen as acceptance of the charges.
The manufacturing sector, just like other sectors of the economy, has been faced with myriad of challenges leading to consistent decline in its contribution to GDP over the past years.
The development, the AGI President said, should be a matter of concern to all particularly given that the sector has twice experienced negative growth rate in the past four years.
Industry contribution to GDP declined from 28 percent in 2012 to the current 25.3 percent, according to figures from the Ghana Statistical Service.
However, with the population growth rate pegged at about 2.4 percent and the teeming number of students coming from the universities yearly, the manufacturing sector is seen to hold the solution to the worsening unemployment situation.
But regrettably the implementation of the Industrial Policy, developed together with the private sector some five years ago, with the objective of resuscitating the manufacturing sector has been poor.
It is against this backdrop that the AGI said a review of the Ghana Industrial Policy and its implementation programme, the Industrial Sector Support Programme, should be immediately considered.
In addition to this it was also suggested that the necessary measures and resources for the full and effective implementation be put in place.
These pronouncements were made at the 56th Annual General Meeting of the AGI, organized for the first time outside the national capital, in Kumasi. It was held under the theme “Growing local industry for export development and job creation.”
Mr. Asare-Adjei commended government for the coming on stream of the TEN project and the subsequent introduction of the FPSO Prof. John Evans Atta Mills as well as the ENI gas processing scheduled for next year.
He noted that industry will be pleased to see a clear plan for linking all these facilities to industrial development.
He also announced that local businesses saved over US$78,000 which hitherto would have gone into the blocked terminal handling charges imposed on businesses not too long ago by some shipping lines operating in the country.
But the Finance Minister, Seth Terkper, said the country is not out of the woods yet of its economic challenges despite the current macroeconomic stability being experienced.
He observed that some drastic measures had to be taken for the country to get to where it is now and appealed that Ghanaians should not despair in the efforts to find lasting solutions to the problems facing the country.
As Ghana confronts with election year budget, Mr. Terkper cautioned that the country must learn to live within it budget while exercising due diligence in controlling expenditure.
He said subsidies have hampered State Owned Enterprises (SOEs) and also hurt businesses in the country. The solution to this, he said, will be to use portions of levies and government revenue that would have been used to pay subsidies to start building strategic stocks.
The former Rector of GIMPA, Prof. Stephen Adei, said there is the need for strategic decision and action to grow industry for job creation.
Commenting on the role of technical universities to industry, he noted that for technical universities to deliver its expectation there must be a special collaboration between government, industry and academia while addressing the challenges confronting them.