Halt the lay-offs - Timber association

The Ghana Timber Millers Organization (GTMO) has advised its members companies (Sawmills) to suspend any plans to lay off more of their workers pending the outcome of its petition to the Ministry of Finance for the review of the reconstruction levy.

The sawmills are said to have already sent home over 30,000 casual and permanent workers representing about 25 percent of the timber industry’s workforce, due to liquidity problems arising largely from the imposition of high levies and taxes on the industry.

The GTMO explained that its advice to the sawmills was in response to a recent appeal by the Timbers and Woodworkers Union of the Trade Union Congress for an end to the retrenchment of workers in the timber industry.

Speaking to newsmen in Kumasi at the weekend, E.E.K. Acquah-Moses, Executive Secretary of GTMO, said: “We are also hopeful that the Ministry of Finance will, this time, respond favourably to our appeal for the suspension of the reconstruction levy in particular.”

The GTMO’s hope, he said, was based on the fact that, “the sector ministry has made the timber industry to believe that the imposition of the reconstruction levy is a temporary measure and will last for two years.”

Acquah-Moses pointed out that as much as the sawmills believed that they had a pivotal role to play in revamping the national economy, it was unfortunate that, as a sector, the timber industry had been targeted to pay “over-burdensome levies and taxes which are killing the industry.”

“As an industry, we are facing the same tax increases and other cost like all other sectors of the economy. We are therefore renewing our appeal to the government to seriously review the levies, especially the reconstruction levy, to avoid further retrenchment in the industry,” he prayed.

The Executive Secretary indicated that the industry had over the last few years, made huge in investment in down-stream processing of mainly lesser-known timber species with over 70 percent processed timber being exported in the form of plywood, veneer and moulded products.

“These major re-investments have seriously affected the liquidity situation most sawmills and this has been exacerbated by the government’s imposition of the reconstruction levy,” Acquah-Moses stated.

According to him, a recent survey indicated that the liquidity crisis facing most sawmills was the direct result of the high reconstruction levy, excessive costs especially huge electricity bills and the undue delay in the location of timber concessions.

The industry, he noted, had had very good support from the banks in the past “but lately, these banks are feeling very jittery about the industry’s ability to generate the necessary cash inflows to sustain their debt and interest repayments.”