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Business News of Wednesday, 6 November 2013


Ghana’s commitment to manufacturing shaky

Government's non-commitment to manufacturing over the years had led to the increased importation of all kinds of goods into the country, leading to a corresponding decline in the growth of industries, the Netherlands Ambassador to the country, Mr Hans Docter, has observed.

The situation, he said, was further compounded by the loose nature of the country’s trade laws, which, he noted, virtually allowed everything from cheap rice to finished cement into the economy.

Interestingly, however, Mr Docter observed that the country did not require plenty resources and/or punitive laws but “some level of seriousness and simple measures that don’t cost a lot” to be able to reverse the situation.

He made the comments at a workshop on business competitiveness organised by the Accra Regional Secretariat of the Association of Ghana Industries (AGI) in Accra.

The event also coincided with the election of regional executives for the association, which was a grouping of manufacturing and related businesses in the country.

“If you want to increase manufacturing, then you have to regulate imports, and that shouldn’t be an issue. It’s about enforcement and leadership, and I don’t think it needs a lot of cost. What you require is some simple measures that really don’t cost much to implement,” the ambassador said.

His comments come in the wake of rising imports amidst a decline in the contribution of manufacturing to the total value of goods of services produced in the country – GDP.

In 2012 for instance, out of the 19.4 million tonnes of cargo that passed through the country’s twin seaports, about 15.3 million tonnes, representing some 70.67 per cent of the period’s total, were imports.

In the case of rice, about 395,194 tonnes of the cereal were imported over last year, representing a 11.7 increment from the 2011 figure of 353,531 tonnes, data from the Ghana Shippers’ Authority showed.

Mr Docter sees this trend as worrying.

Using rice as an example, he lamented the fact that the country was importing huge quantities of the cereal, mostly from neighbouring Cote D’Ivoire, despite having the potential to produce.

“You have to look at how you regulate trade. I’m not saying imports are not good, but the cheap ones are the problem. If you can produce something, why import it,” he asked.

Ghana losing competitiveness

Already, the ambassador said the country was losing its competitiveness in the arena of trade to countries such as Cote d’Ivoire and thus called for policy interventions that would help revert the situation.

“Cote D’Ivoire is becoming a top reformer in the sub-region and is definitely a threat to Ghana. In terms of trade too, you realise that Ghana imports a lot of rice from them although you can produce and all this go against your competitiveness,” Mr Docter said.

The Vice President of AGI in-charge of the SME sector, Mr Samuel Appenteng, also lamented Ghana’s over-reliance on imports to the neglect of the industry and further called for technical barriers that would help stimulate growth in the industry.

“If you look at our economy, you realise that about 70 per cent of the products in the country are imported, and that is bad. That is why there is the need for some technical barriers to importation in this country,” Mr Appenteng said.