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Business News of Wednesday, 23 April 2008

Source: NII Kwaku Osabutey ANNY

More than $200m Chinese imports into Ghana 2007 alone

It has been disclosed that more than $200m worth of Chinese goods were imported into Ghana last year alone. Chief Executive of a Tema based food processing company, Leticia Osafo-Addo told the dailyEXPRESS that the trend if not checked can ruin indigenous businesses.

According to her, the figure is not even a quarter of what most local companies are able to export outside Ghana. She added that those who dare export do not even make the expected returns.

Mrs. Osafo-Addo who has been consistent in her pleas with government to protect and promote local businesses reiterated her position that appropriate administrative measures must be put in place to regulate the trend before the remaining businesses collapse.

Statistics from the Ghana Investment Promotion Centre (GIPC), according to the Chinese Ambassador to Ghana Mr. Yu Wenzhe, show that between September 1994 and June 2007, two hundred and eighty-three (283) Chinese businesses were registered in Ghana. This makes China the biggest investor in Ghana.

Out of the 283 however, only 97 were listed as manufacturing entities, 59 general trading, 44 service providers, 15 construction companies and as many as 48 tourist agencies. The total number of Chinese companies in Ghana is however believed to have increased between last year and now.

These companies including those ostensibly into manufacturing and many Ghanaian businesses as well are responsible for the increasing volume of goods imported into the country from China. They include office and home furniture, used clothings, durable and cheap electronic appliances, computer products and its accessories and lately food related products.

Mrs. Osafo-Addo, who is also a Vice President of the Association of Ghana Industries (AGI) said most small businesses in the country have collapsed because they are not in a position to face the stiff competition that the Chinese imports are giving them. They have therefore also branched into imports.

“There are a greater number of them who have also folded up, diverting their attention to China.”

Mrs. Osafo-Addo, who also heads the small scale sector under the AGI told the dailyEXPRESS that most small businesses who do not have the capacity to divert and join the moving Chinese vehicles have folded up, adding on to the country’s rising unemployment rate.

She insisted that many of the Chinese imports are of inferior quality but many people patronise them because of their low prices. The AGI Veep stressed the need for government to ensure that more stability is achieved in the private sector if Ghana is serious about the sector contributing to the growth of the economy.

On the Economic Partnership Agreement, Mrs. Osafo-Addo stated that business owners in the country are not necessarily against it but are concerned that it “should benefit all parties.” According to her, it’s unreasonable for those pushing for the EPA, especially from the developed countries to be asking the Ghanaian government not to reintroduce subsidies scrapped years ago (as part of IMF/World Bank proposals) when they offer huge subsidies to their companies. She mentioned that developed economies are ready to give soft loans and offer tax incentives to their own people “but here you have to do everything yourself.” She was of the view that the agreement must come along with fair and transparent trade for all parties.

In a separate interview, the Head of the EU Delegation to Ghana, Filiberto Ceriani Sebregondi told reporters from both the Washington Post (US) and dailyEXPRESS in his office that, the EPA gives Ghanaian businesses a much larger market to access in Europe. He said 20% tax incentives would be offered to cover areas such as agriculture, agro-processing products and infant industries products.