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Business News Wed, 31 Jul 2019

Local steel manufacturers lament high power tariff

The Steel Manufacturers Association of Ghana (SMAG) says the cost of power is dealing a heavy blow to the growth and development of the industry.

Members of the association on Tuesday visited Parliament to meet legislators on the committee on Energy and Trade and industry over the matter.

They had earlier petitioned the Speaker of Parliament, Prof Mike Ocquaye, over the recent increase in electricity tariff.

The Executive Secretary and Consultant of the association, Dr George Dawson-Ahmoah, told the press after the meeting that SMAG made a presentation to the legislators about the strategic importance of the steel industry to the economy among other.

He said the meeting with Members of Parliament also discussed other challenges causing unrest in the industry.

Dr Dawson-Ahmoah highlighted two key challenges namely: the increase in electricity tariff of over 92% and the ever-increasing importation of steel into the country.

“We are saddened by the fact that the number of steel manufacturing companies in Ghana were 8 but 2 of them have recently collapsed because of these unfavourable business conditions. It is worthy to note that the local steel industry employs about 3,000 direct workers and 10,000 indirect workers. The companies also contribute significantly towards government revenue in the form of taxes,” he said.

Dr George Dawson-Ahmoah who doubles as the Executive Secretary of the Chamber of Cement Manufacturers stressed that the steel industry also uses local content by providing jobs for over 10,000 scrap dealers and it is expected to consume about 1.2 million tonnes of scrap for production annually.

The installed capacity of the local steel industry is about 1,200,000 metric tonnes per annum against an annual average demand of about 350,000 Metric tonnes per annum which results in a surplus of 850,000 metric tonnes per annum. How can we kill such an industry by encouraging the importation of finished steel products when it has such a huge surplus capacity” he questioned.

Dr Dawson-Ahmoah on behalf of the Association called on Government to immediately suspend the increased electricity tariff until a proper in-depth inquiry is made to ascertain the proper assessment. “Our checks have it that some of our neighbouring countries pay as low as 0.9 Cent per Kw/h of electricity so until the enquiry is concluded we are requested that the old tariff of Gh. 0.41 pesewas must be maintained as an interim tariff”.

On the issue of the illegal importation of steel products into the country, the Association is appealing to Government for a legislative instrument (LI) which will introduce quotas that will regulate the importation and also to introduce certain levies as safeguard measures on importation to protect the local steel industry.

“Countries such as China, Egypt, Ethiopia, Nigeria and Congo have instituted such measures and Ghana can take a cue to protect our dear local steel industry from collapse”.

Steel Manufacturers Association of Ghana

Members of the Steel Manufacturers Association of Ghana include Sentuo Steel Company Limited, Tema Steel Co. Ltd, United Steel Company, Rider Steel Ltd, Ferro Fabrik Limited and Fabrimetal Ghana Limited.

Source: Myjoyonline.com