Gov't offers lifeline to textiles industry

The government has embarked on a renewed move to ensure that the local textiles and garments industry remains competitive by stepping up measures to forestall the smuggling of such products into the country.

To this end, it has directed the Customs Excise and Preventive Service (CEPS) and other security agencies to be vigilant, especially at the ports, arrest and destroy smuggled textiles and garments.

It has also directed CEPS to ensure that all importers of textiles and garments products pay the correct duties and taxes to avoid dumping of such products on the Ghanaian market.

Mr Mahama Ayariga, Deputy Minister of Trade and Industry, announced this at Juapong in the Volta Region on Tuesday when he paid a visit to the Volta Star Textiles Limited (VSTL) to familiarize himself with the operations of the company.

The Deputy Minister, earlier in the day, visited Printex Limited on the Spintex Road and the Ghana Textiles Manufacturing Company (GTMC) at Tema.

At separate meetings, managements of the companies told Mr Ayariga that the textiles and garments industry in the country was facing serious challenges, including unfair competition from cheap foreign products, smuggling, erratic water and electricity supply, high cost of raw materials, which threatened the survival of the industry.

The industry, which was once vibrant, employing a substantial number of Ghanaians, now hardly breaks even, driving managements to lay off about 90 per cent of their labour force.

However, Mr Ayariga said the government was committed to reversing the trend to ensure the industry operated at full capacity to enable it benefit from the economies of scale and provide jobs for the people.

According to him, government was also working to ensure that trade protocol arrangements among ECOWAS members were respected to allow Ghanaian textiles and garments manufacturers to market their products in the neighbouring markets just as they were allowed to do so in the country.

He said government was extending support to the local cotton industry by making available to farmers, inputs at affordable prices to boost their production to serve as raw materials for the local textiles and garments industry.

Mr Ayariga noted this would ensure that cotton prices ebbed to make the production cost of the industry low to enable it withstand the competition and shocks from the cheap foreign products.

He said government was also looking at options to ensure regular supply of water and electricity to the textiles and garments industry at reasonable rates to cut down on its production cost.

According to the Deputy Minister, government was implementing all those measures to ensure that additional 30,000 jobs were created from the sector for the youth.

He urged industry players to cooperate with government as it implemented solutions to turn around the fortunes of the industry.

Meanwhile, the situation at the VSTL, a wholly state-owned company, was not encouraging as the factory was still running test production even though it was incorporated late 2007.

Management said the company was producing at 70 per cent below capacity even though it received substantial orders from customers it cannot meet those demands.

For the company to be able to produce at full capacity, government must inject GHc14 million into its operations.

Management said at full capacity operations, the company could provide additional 600 jobs.