Feature: African prints: Ghana the biggest loser

AS to when African prints business came about in Ghana, one cannot pinpoint, but history has it that as at the mid-1970s, about 16 large- and medium-size textile companies had been established in Ghana.

Where those companies vanished to is an issue for another day, but currently only four out of the 16 are surviving today. They are Ghana Textile Manufacturing Company (GTMC), Akosombo Textiles Limited (ATL), Ghana Textile Printing (GTP), and Printex.

Despite weathering the storm to date, it is an open secret that the four companies are facing serious production challenges. According to official sources, the market share of the four companies have reduced dramatically, at least by 50% or may be more, as a result of smuggled or pirated goods that come in to compete.

A few years back, for instance, both ATL and GTP were so firmly on the ground that they even established football clubs, which created further employment for the youth. ATL’s team was Akotex while GTP’s team was popularly known as ‘Dumas Boys’. Both teams featured in the First Division Football League in the country, rubbed shoulders with the traditional clubs in the country and also produced players for the national team-building effort.

But today, a visit to any of the four surviving companies reveals a total drop in their production, a dispirited workforce and a management team virtually struggling to get things going.

So, what are the challenges facing our textile industry? What is it that has suddenly brought the companies to their knees after a brilliant start only a few years back?

The answer is not too far to fetch. The Sales and Marketing Director of ATL, Steve Dutton, is on record to have said that the major challenge has to do with the nation’s inability to fight the import of cheaper products from China, India and other Far East countries.

“As far as ATL is concerned, we, like the other textile companies in Ghana, have been affected badly by cheaper foreign imports, specifically from China, India and places like that. Usually, they come in from Togo, which is a free port; so they are not paying any import duties or tax and it seems they are smuggling the goods into Ghana.

“It’s true to say that has affected everybody’s business in Ghana but not only because of the cheap price, but also because they are copying the designs and sometimes the brands of the local manufacturers, causing a lot of confusion in the market,” Mr Dutton stressed.

Fighting the import of pirated textile

Government has already established task forces to seize and dispose of the pirated goods. But that alone is not enough since the seizure does not discourage the traders from buying the goods, and also, most times, before the task force gets to the market, word already gets to the market and most of them are able to hide the goods and close their shops before the members of the task force get there.

It has come to light that most of the goods come through Togo because they operate a free port system. There is, therefore, the urgent need for a thorough check at the borders to help solve the problem.

Also, the operations of the task force would have to be on regular basis to deter the traders from buying the pirated goods.

High patronage

Why do Ghanaians patronise the pirated goods? Speaking to some traders of cloth at the Makola market in Accra, they all had similar answers to give. “Considering the economic condition of the country, the average Ghanaian will go for a cheaper product with good quality than go for one which is twice expensive. After all, the designs are the same”.

These words of a trader at the Makola market, popularly known as ‘Hadjia’, sum up everything. From her statement, it can be safely deduced that most people consider the price factor more than quality so it makes the local people patronise the imported ones more since it costs less.

Expensive local textiles

It is generally believed that prices of locally manufactured textiles are more expensive than those brought in from elsewhere, and this explains why the patronage is very low on the Ghanaian market. For instance, whereas in Ghana the cost of materials and utility bills (electricity, water, fuel) are very high, it is the opposite in China.

Again, in Ghana, statutory levies, duties, taxes, excise duties – VAT (15%), NHIS (2.5%), SSNIT (13.5%), account for about 40% of production costs whereas Chinese textiles that enter Ghana evade adequate duties, taxes and tariffs on entry of the products to the country.

In addition to all these, Chinese textile companies are offered about 13% Export Subsidy by their government, and this puts their Ghanaian counterparts at a huge disadvantage.

What happens to the seized products?

According to ‘Hadjia’, the members of the task force claim they take the seized items to the Trade Ministry. “I personally followed up when they first seized our items. I went to the police station and they asked me to go to the Trade Ministry and when I got there, they showed me the items but they said I can’t have them because they are fake and they were going to be burnt”.

It is rumoured among the women that not all the seized products are actually burnt as they are made to believe. They claim most of the items are stolen by the task force workers themselves, and some of them even resell the seized items to other people. I cannot establish the veracity of ‘Hadjia’s’ claim, but the truth is that there is no smoke without fire.

Way Forward

Government has to make a firm decision if the local industries must survive. And, for me, the way forward is to completely ban the importation of these fake textiles.

Members of task forces must also execute the duties to the very best of their abilities so the seized items don’t find their way back on the market.

Finally, the traders must be educated on the effect of their actions on the county’s economy.