Business News of Thursday, 24 January 2013

Source: Graphic Business

Market flooded with imitated goods

The local market is currently being flooded with different kinds of imitated and substandard commodities, including textiles, beverages, mobile phones, detergents which are mostly imported into the country.

While some of the imported items have their local substitutes, others have both the imitation and the original imported onto the local market, with such an impunity that leaves one wondering whether Ghana understands globalisation and free trade more than any country.

Interestingly, these imported items come with lower prices; hence have become the preference of a lot of people much to the detriment of local producers who are currently struggling to match the competition from their imported counterparts.

GRAPHIC BUSINESS checks at the Makola market in Accra, the wholesale and retail selling points of most of such products provided unambiguous evidence of imported items such as milk, detergents, mobile phones and most prominently textiles with pirated local designs of different competing kinds. For instance Aluworks and other aluminum companies have been struggling with competition from cheaper aluminium imports from China.

Again an unknown brand of imported milk was being sold at GH¢1.50 for three tins as against a locally produced brand, which goes for GH¢1.50 a tin. Again, while an original Nokia mobile phone goes for GH¢85, its imitated version sells at GH¢40, the GRAPHIC BUSINESS market survey revealed.

The local textile dealers have also had a fair share of this as pirated textiles are selling far cheaper than the original. The original of Da Viva wax print, a product of Akosombo Textile Limited (ATL), is sold for GH¢8 a yard, the imitated one is sold at GH¢3 a yard, implying patrons will need almost three times the amount of the pirated one to get an original print.

In the latest Gross Domestic Product (GDP) figures released by the Statistical Service, the agricultural sector recorded the highest growth rate of 4.6 per cent, followed by industry with 3.6 per cent, with the services sector recording a decline of negative 2.2 per cent.

However, the main contributors to the industry sector was not the manufacturing sub-sector but the construction sub-sector, which recorded 19.2 per cent growth, followed by mining and quarrying with 5.2 per cent and water and sewerage activities with 0.6 per cent.

The local textile industry is perhaps, the most perfect example of how unbridled imports, piracy and dumping have negatively affected the economy.

The textile industry used to be vibrant in Ghana with over 20 textile firms employing more than 25,000 people. Currently, only four of the textile companies remain and are even struggling to survive, with less than 3,000 people in employment.

Sadly, due to their affordability and how they have been expertly mimicked to look like the original, many people as well as the traders selling them prefer buying them despite being aware that they are the pirated ones.

The surviving companies have been running plethora of advertisements in recent times to educate the public in the dangers of patronising imitated products. Unfortunately, these commercials alone are not enough to save the local textile industry from extinction.

As the adverts keep increasing, so are the pirated textiles flooding our market giving the local companies uneven playing field that is gradually pushing them further out of business.

A retailer at Makola market, Madam Vivian Sowah, told the GRAPHIC BUSINESS that the textiles from China, namely, Sikaprint, Hi-target, Ordine are still in the market because they were cheaper and people patronised them a lot.

She expressed her preference to selling them because they were cheaper and gave her value for money as customers do not patronise the local prints as much.

Clearly, the textile industry is at an ailing stage struggling to survive and several calls by industry players for interventions have yielded no results.

The President of Spinnet Textile and Garment Cluster, Mrs Edwina Assan, told the GRAPHIC BUSINESS in an interview that because Ghana had a liberalised trade, it was not able to fully regulate what was imported into the country and therefore called for a review of the policy so it regulates what is imported into the country.

A taskforce set up to rid the market of these pirated textiles, comprising representatives of the security agencies, the Ghana Standard Authority, the local manufacturers and the trade unions seem to have made no headway as they have to deal with persistent resistance from traders, who sometimes endanger the lives of the group.

The continued extinction of the textile industry would throw people out of jobs and have revenue implications for the government, as since they are not able to pay taxes, a typical example which occurred just last year.

The Ghana Revenue Authority closed down the premises of the Akosombo Textiles Limited (ATL) for not honouring its tax obligations after the company had laid off several workers to be able to meet its costs and stay in business.

Information available to the GRAPHIC BUSINESS by the Textile, Garment and Leather Workers’ Union (TEGLEU) indicate that local textile manufacturers enjoy only 30 per cent of the market share in Ghana, while imported/smuggled/under invoiced dealers get 70 per cent market share, a clear indication that the industry is suffering.

It also said as of 2002, the Budget Statement of the government indicated an annual loss of GH?30 million to the state as a result of illicit textiles imports, adding that the high level of graduate unemployment could be worsened if the textile industry was allowed to lay off more workers.

The General Secretary of the Union, Mr Abraham Koomson, told in an interview said that the monitoring activity of the task force had been halted due to the festivities and that paved the way for the pirated textiles to flood the market.

According to him, they are currently waiting for government to settle so they could continue solving the outstanding issues with them and the taskforce would now gear for action.

He explained due to the elections, they had to suspend their activities since attempts to seize pirated textiles were politicised which was an impediment on the path of government hence their decision to strategically calm it down.

That notwithstanding, however, Mr Koomson explained they were waiting for who would be appointed the Minister of Trade so they can work in collaboration with that person.

He lauded the efforts by the administration of the government to help salvage the industry, adding the Akosombo Textiles Limited had been able to pay part of the debt it was owing, stressing that all those problems were caused by the influx of pirated textiles.

“For instance, one can easily come across a Chinese fabric with a GTP, Printex or ATL name and logo on it, therefore making it a hot commodity on the market, due to their relatively cheaper price,” Mr Koomson said.

The Head of Public Relations at the Ghana Standards Authority (GSA), Mr Kofi Amponsah-Bediako in an interview with the GRAPHIC BUSINESS on January 18 said the plethora of brands seen on the market was a reflection of the country’s liberal trade policy.

“Our trade policy allows various manufacturers and importers to come into the country to compete with the local manufacturers. And to this extent you cannot get up and stop anybody from bringing in a product, provided the person follows the approved channel,” he explained.

Mr Amponsah-Bediako said that goods brought into the country which did not measure up to standards set by the GSA were seized at the ports and not allowed entry into the country.

He said imported products were controlled under the Destination Inspection Programme which subjected goods arriving into the country to examination and testing to find out whether they conformed to local standards.

“The problem is sometimes they are not stored under proper hygienic conditions, often displayed in the hot sun, and as such even if they are good at the point of arrival, they go bad in a few days,” he said.

On the influx of textiles, he explained the Ministry of Trade and Industry was taking steps to ensure local textiles were not pirated and imported into the country.