At the recent town hall meeting held by the Economic Management Team, Vice President Dr Mahamudu Bawumia announced that government has reduced the benchmark value for imports by 50 per cent, while the benchmark value for vehicles has also been reduced by 30 percent effective April 4, 2019.
The announcement was hailed by some importers including spare parts dealers. But the Association of Ghana Industries (AGI) which is crying foul over the import duties cut is predicting that that it will collapse local businesses.
AGI President Dr Yaw Adu Gyamfi told the 15th Congregation of the Koforidua Technical University in the Eastern Region that the cuts are inimical to the interest of local businesses.
“What the government is saying is that all the imports coming into the country you are reducing the duties by 50 percent? It means you are promoting importation rather than promoting local production. As a result there is going to be influx of imports. These imports will continue to displace our locally manufactured products,” he stated.
Food and Beverage Industry
Local producers of food and beverages say the import duties cuts will also make them uncompetitive as some importers bring in cheap products from other countries. Executive Secretary of the Food and Beverage Association of Ghana Samuel Aggrey has hinted that his members will lay off workers as they struggle to even break-even.
“The local manufacturers will suffer. If it comes to the rice farmers what is there for them to benefit from to mitigate the losses they will incur? If it comes to the fruit juice industry and the soft drinks industry what is there for them to also recover? What this has come to do is to rather create more problems for industry. Unfortunately, we are looking at the expediency of a political game and which will run down the local industry. We will have an influx of imported products and we have to lay off workers. That will be most unfortunate,” he said.
The announcement of the import duties cuts has also heightened fears of local manufacturers of textiles. General Secretary of the Textile, Garment and Leather Employees Union (TEGLU)
Abraham Koomson has described the cuts as disastrous considering the stimulus package provided by the government to revive the ailing textile companies.
“One group makes noise and you try to address their concerns without looking at the other side of it. And this is very dangerous for the economy because we are talking about job creation and we are talking about the depreciation of the Cedi. And we all know that the fundaments have to do with these unbridled imports of goods that can be produced here. You want to encourage importation of and then you come back and complain that your Cedi is not doing well. Common sense will tell even an illiterate that if you want to depend on imports it will not auger well for the growth of the economy.