Creating monopoly in steel industry harmful to economy - SEDA

Accra, July 26, GNA 96 The creation of monopoly in the scrap metal trade as a result of an administrative ban on the export of ferrous metals is harmful to the Ghanaian economy since it has thrown many small-scale operators out of business, GNA investigations have revealed. The President of Scrapmetals Exporters and Dealers Association (SEDA), Mr Thomas Kwarteng-Amaning said the negative impacts of the ban were both economic and social.

He said the ban, which was imposed during the Provisional National Defence Council (PNDC) era, was outdated since it ran counter to the present liberal democratic dispensation.

The SEDA President said the ban had put the local steel companies in a monopolistic situation where they decided on how much to pay for the product, adding that while the current price offered on the London Metal market was 240 dollars per tonne the local steel companies were offering 110 dollars per tonne. They should be offering at least 210 dollars free on board (F.O.B).

He said the ban had turned the about 25,000 scavengers of ferrous metals into slaves, and, therefore, called on the Government to lift the ban with immediate effect to create a level playing field for competition.

"We believe that if the ban on exportation were lifted the livelihoods of these 25,000 scavengers would be improved remarkably since the exporting companies would offer competitive prices,=94 SEDA said.

Mr Samuel Bortsi, Director in charge of Small and Medium Enterprises and Technology of the Ministry of Trade, Industry and President's Special Initiatives, said the ban, which was an administrative one, was to guarantee sustainable operations of the local steel industry that at the time had installed electric arc furnaces for the melting of ferrous scraps into billets.

He said upon realizing that one of the companies had contracted an International Finance Corporation (IFC) loan of six million dollars for a steel mill during the period, the Ministry decided to impose the ban. Mr Bortsi said at the moment there were four steel mills in the country - Tema Steel; Ferro Fabrik; Western Steel and Forgings and Wahome Steel.

He said the mills required about 300,000 tonnes of ferrous scraps annually and they sometimes had to import scraps from neighbouring countries to augment their stock, adding that the local steel mills employed about 2,000 people.

Mr Nirmal Patel, Operations Executive of Tema Steel Company, insisted that the ban was necessary to protect the local steel companies, saying that if the ban were lifted their business would collapse.