Smuggling at inland borders killing local rice industry

Lifting the ban on importing rice through the inland borders of the country is encouraging and fostering smuggling – a situation the Ghana Rice Inter-professional Body (GRIB) has said is discouraging investors from investing in the local rice industry.

According to the Executive Secretary of GRIB, Evans Sackey Tye, the ban – which came in force in 2011 but was lifted prior to the 2016 general elections – has left the local rice industry to suffer from unfair competition.

“In 2011, the previous government banned importation of rice through the inland borders — Elubu, Togo and Aflao. The problem at the time was that people were smuggling a lot of rice into the country without paying any duty on it. And because of that, they were able to price their products lower and sell cheaper than the local rice. So, we advocated that a ban be placed on it so that all rice imported would be through the ports.

“And the ban was enforced until August 2016 — before the election — when it was lifted. The Ministry of Trade say they have been able to resolve the problems at the inland borders, and that is why the ban has been lifted,” he said.

Mr. Sackey argued, however, that lifting the ban has brought back smuggling – pushing consumers into abandoning locally-grown rice for the cheaper imported ones, and making the local industry unattractive to investors.

“This is causing more problems than was formerly the case. It has opened the borders for smuggling to take place, and this has brought a lot of cheap rice onto the market – killing the local industry.

“The situation is discouraging many investors from investing in the rice industry because consumers will definitely go in for the cheap rice, and that is hurting the local industry. People were really showing interest when the ban was active, but now the interest is no longer there,” he said.

Beside the effect the situation is having on the local industry, government is also losing a lot of revenue through this and other related acts.

Finance Minister Ken Ofori-Atta said in his Mid-Year Budget Presentation that government could not realise its revenue target for the mid-year.

According to him, from Jan-May 2018 fiscal performance shows that the total revenue and grants fell short of target by GH¢1,428.7million (0.6% of GDP), while total expenditures were below target by GH¢796.5million (0.3% of GDP) – resulting in a cash fiscal deficit of GH¢6.3billion (2.6% of GDP), against a target of GH¢5.7billion (2.4% of GDP).