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Business News of Friday, 18 March 2016

Source: Graphic.com.gh

Spio-Garbrah faces vote of censure over ban on cashew export

Parliament has advised the Minister of Trade and Industry, Mr Ekwow Spio-Garbrah, to immediately withdraw a moratorium he has placed on the export of raw cashew nuts which is to take effect from March 31, 2016.

It said the suspension was illegal and would negatively affect cashew farmers in the country.

It warned that if the minister failed to heed the call of members within the next few days, the House would, by a resolution, pass a vote of censure for the revocation of his appointment by the President, in line with Article 82 of the 1992 Constitution.

The House made the decision after the Deputy Majority Chief Whip, Mr Ahmed Ibrahim, drew the attention of members to the illegality of the decision through an urgent statement he made on the floor yesterday.

Minister's directive

The minister’s directive which was made available to the House by Mr Ibrahim, read: "The Ministry of Trade and Industry with oversight responsibilities for Trade emulations and controls under the Import and Export Law Act (503) Section (13) of 1995 as amended in 2000 has issued the following administrative directives on the purchase and export of raw cashew nuts.”

“Henceforth, all traders and processors are to note that they are allowed to purchase raw cashew nuts during the main harvesting season from January to June but export of raw cashew nuts is permitted only after May 31 onwards.

“Any raw cashew nuts that are brought to the ports or borders of Ghana for export between March 31 and May 31, 2016 shall be confiscated to the state.

“The public is hereby obliged to take note and comply with this directive.
“It has been noted with concern that as much as 95 per cent of Ghana's total production of cashew nuts, estimated at 68,000 metric tonnes, in its raw form is sent overseas for processing.”

“Processing of raw cashew nuts into cashew kernels in Ghana increased from 425 metric tonnes in 2009 to 17,600 metric tonnes but reduced to 2,500 metric tonnes in 2015. This implies that the industry is operating below capacity.

“Local processors are unable to obtain adequate supply of raw materials for processing due to intensive competition, with purchases from traders at the farm gate.

“This situation is stifling the ministry's objective of promoting value addition under the National Export Development Programme.
“The survival of the industry which is processing cashew in Ghana is on the brink of collapse and will only survive on the availability of adequate supply of raw cashew nuts for processing," the ministry said.

Constitutional provision

Article 82 of the 1992 Constitution states: "Parliament may, by a resolution supported by the votes of not less than two-thirds of all the members of Parliament, pass a vote of censure on a Minister of State.

(2) A motion for the resolution referred to in clause (1) of this article shall not be moved in Parliament unless-

(a) seven days' notice has been given of the motion; and
(b) the notice for the motion has been signed by not less than one-third of all the members of Parliament;

(3) The motion shall be debated in Parliament within fourteen days after the receipt by the Speaker of the notice for the motion.

(4) A Minister of State in respect of whom a vote of censure is debated under clause (3) of this article is entitled, during the debate, to be heard in his defence.

(5) Where a vote of censure is passed against a minister under this article the President may, unless the minister resigns his office, revoke his appointment as a minister.

(6) For the avoidance of doubt this article applies to a deputy minister as it applies to a minister of State.”

Ibrahim's statement

Mr Ibrahim said the cashew sector held much promise and potential, adding that production of the crop was providing income to the poor in communities such as Sampa, Banda, Hani, Debibi, Wenchi, Kintampo and Techiman in the Brong Ahafo Region and Bole and Bambo in the Northern Region, among other areas.

The crop, he said, had, however, suffered a major price reduction from GH¢4.50 per kilogramme to GH¢2.50 per kilogramme within one week as a result of Mr Spio-Garbrah’s "illegal" directive.
"Under what law is the ministry going to confiscate raw cashew nut without due process?" he asked.

According to Mr Ibrahim, who is also the member of Parliament for Banda, the cashew industry is a private sector one with a liberalised environment.
The situation, he added, had attracted most of the youth into cashew production due to high prices.

"Mr Speaker, if we want to protect the few processing companies in the country, it must not be at the expense of the poor farmers who constitute the majority of the players in the industry. Honestly this directive has brought untold hardships to the poor farmers.
The timing of the directive is wrong as most traders have already pre-financed farmers," he said.

Mr Ibrahim said if the minister was bent on implementing such a policy, he should have sought legal backing and educated the cashew farmers on the issue.
He pointed out that the decision would create a monopoly for processors of the crop and added that policy makers needed to study and implement other policies.

Leadership

The Majority Leader, Mr Alban Bagbin, accused the minister of acting like ‘Don Quixote’ and said if the minister dared disobey the House, it would invoke Article 82 of the 1992 Constitution.

He said the directive had no legal basis and was arbitrary.
The Minority Leader, Mr Osei Kyei-Mensah-Bonsu, said the House could summon the minister or cause a motion to be filed to ask him to withdraw the directive.

If he fails to withdraw, he said, Parliament would initiate the process to have him impeached.
All other members who contributed to the statement emphasised the illegality of the minister’s action and said it needed to be withdrawn or sanctions applied.