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Business News of Thursday, 13 January 2022

Source: www.ghanaweb.com

Benchmark Value: Changes expose government's inconsistency - Ricketts-Hagan

Kweku Ricketts-Hagan, former deputy Minister of Finance Kweku Ricketts-Hagan, former deputy Minister of Finance

GRA reverses 50% benchmark value policy on selected items at ports

GUTA says cost of doing business at the ports to increase

Akufo-Addo orders suspension of reversal of benchmark policy


A former deputy minister of Trade and Industry, Kweku Ricketts-Hagan, has said that the implementation of the benchmark value discount policy in 2019 and its quick reversal in less than 3 years of implementation showed that the government is inconsistent in terms of its trade and industrialization policies.

According to him, vice President, Dr Mahamudu Bawumia has few questions to answer for his inconsistency in the benchmark policy.

In a Facebook post, he said, the government implemented the benchmark value discount policy in 2019 at a time when it had started One-District-One Factory (1D1F) and claimed to be helping local production and local businesses.

The policy he added was "counterproductive to a government that said it was supporting local business to grow. At that time the Association of Ghana Industries (AGI), who represents local businesses was against the policy but government at that time seemed oblivious to helping local businesses."

Ricketts-Hagan said government seemed unperturbed about the effect of the policy on local production and businesses.

Although president Nana Addo Dankwa Akufo-Addo has ordered the suspension of the policy after its withdrawal being petitioned by the Association of Ghana Industries (AGI), the MP believes the motivation and interest are "unsurprisingly, different from that of AGI" who urged government to remain focused on its industrialization agenda.

“It has nothing to do with helping local production. The government wants money pure and simple to continue to pay for its bad economic policies, over borrowing, over promising, reckless and luxurious expenditure,” Ricketts-Hagan argued.

Below is his post:

Reversal of Benchmark Value discount policy shows the inconsistency in Government policy on Trade and Industrialization The implementation of the benchmark value discount policy in 2019 and its quick reversal in less than 3 years of implementation, shows that, the government does not know what it is doing in terms of its trade and industrialization policies.

Government implemented the benchmark value discount policy in 2019. Surprisingly at a time when it has started One-District –One Factory (1D1F) and claimed to be helping local production and local businesses. The policy was counterproductive to a government that said it was helping local business.

At that time, the Association of Ghana Industries (AGI), who represents local businesses were against the policy but government at that time seemed oblivion to helping local businesses. They couldn’t care less about how the policy was going to affect local production and local businesses.

This is the same government that has today taken shelter with AGI, in reversing the benchmark value, but their motivation and interest are unsurprisingly, different from that of AGI. It has nothing to do with helping local production; the government wants money, pure and simple to continue to pay for its bad economic policies, over borrowing, over promising, reckless and luxurious expenditure.

In 2019, their interest was to please Importers, spare parts dealers at Aboso Okai and mainly members of Ghana Union of Traders Association (GUTA) to get their votes in the 2020 general elections and do away with them after the elections, which they have successfully executed and failed to live up to their promises. When Dr. Bawumia declared 50% benchmark value on imports at his Town hall Meeting on April 3rd, 2019, I could not agree more with him. He said and I quote: “Cabinet is making these reforms, these decisions with the objective of increasing trade facilitation and efficiency, and revenue. Ports revenue depends on volume, so if you don’t have the trade facilitation, you will not have the volume. And if you don’t have the volume you will not have the revenue. That is the thinking that is informing this decision, so we are looking at increasing revenue but to do so, we cannot be uncompetitive between Ghana and our next door neighbor [Togo].

That is just shooting ourselves in the foot, so to reduce the incidence of smuggling and enhance revenue, the benchmark delivery values of imports will be reduced by 50%. However for vehicles, the reduction will be 30%.”

So, I have a few questions for Dr. Bawumia:

What has changed? Are we not interested in reducing the incidence of smuggling anymore and enhance revenue at the ports?

Is being competitive with our next-door neighbor [Togo] no longer relevant?

Are we happy to shoot ourselves in the foot now?

Doesn’t Port revenue depends on volume anymore?

How would you get volume, if your policy hinders trade facilitation?