AGI and other local manufacturers bare teeth at gov’t over cuts in import duties

What was touted as good news for Ghanaian businesses following the outcry over exorbitant import duties has ruffled feathers within the business community.

At the recent town hall meeting held by the Economic Management Team, Vice President Dr Mahmoud Bawumiah announced that government has reduced the benchmark value for imports by 50 percent, while the benchmark value for vehicles has also been reduced by 30 percent effective April 4, 2019.

The announcement was hailed by some importers including spare parts dealers. But the Association of Ghana Industries (AGI) which is crying foul over the import duties cuts is predicting that it will collapse local businesses.

AGI President Dr Yaw Adu Gyamfi told the 15th Congregation of the Koforidua Technical University in the Eastern Region that the cuts are inimical to the interest of local businesses.

“The recent government policy of reduction of import duties by 50 percent for general goods and 30 percent on duty for automobiles. What the government is saying is that all the imports coming into the country you are reducing the duties by 50 percent? It means you are promoting importation rather than promoting local production.

As a result, there is going to be an influx of imports. These imports will continue to displace our locally manufactured products”.

Food and Beverage Industry

Local producers of food and beverages say the import duties cuts will also make them uncompetitive as some importers bring in cheap products from other countries.

Executive Secretary of the Food and Beverage Association of Ghana Samuel Aggrey has hinted that his members will lay off workers as they struggle to even break-even.

“The local manufacturers will suffer. If it comes to the rice farmers what is there for them to benefit from to mitigate the losses they will incur?

If it comes to the fruit juice industry and the soft drinks industry what is there for them to also recover? What this has come to do is to rather create more problems for the industry. Unfortunately, we are looking at the expediency of a political game and which will run down the local industry. We will have an influx of imported products and we have to lay off workers. That will be most unfortunate.”

Textile Industry
The announcement of the import duties cuts has also heightened fears of local manufacturers of textiles. General Secretary of the Textile, Garment and Leather Employees Union (TEGLU) Abraham Koomson has described the cuts as disastrous considering the stimulus package provided by the government to revive the ailing textile companies.

“One group makes noise and you try to address their concerns without looking at the other side of it. And this is very dangerous for the economy because we are talking about job creation and we are talking about the depreciation of the Cedi.

And we all know that the fundamentals have to do with these unbridled imports of goods that can be produced here. You want to encourage the importation of goods and then you come back and complain that your cedi is not doing well.

Common sense will tell even an illiterate that if you want to depend on imports it will not augur well for the growth of the economy.