Chief Executive Officer (CEO) of the Association of Ghana Industries (AGI), Seth Twum Akwaboah has admitted they lobbied for the reversal of the benchmark value on imports because it was negatively affecting the growth of local industries.
The businessman noted that the introduction of the benchmark values reduced the cost of imports with duties being reduced by half, making imported products cheaper than locally manufactured ones. “With this being the case in our markets, local manufacturers were making losses and that is why we lobbied for the reversal of the benchmark value on imports for local manufacturers to progress.”
Sharing insights into the plight of local industries with the introduction of the benchmark value, he indicated that local rice manufacturers recorded heavy losses. “Local rice manufacturers had to lay off staff and the few remaining were not even paid as patronage of their goods dwindled. This happened because the benchmark value made imported rice cheaper than the local ones. Oil, poultry and t-roll producers all made losses this Christmas as cheaper imported ones flooded the market.”
According to him, government’s industrialization agenda itself has suffered from the introduction of the benchmark value “and it is right for us to call for the reversal because such policies do not help the local manufacturing sector.”
Seth Twum Akwaboah admitting the AGI needs to be inward looking to become competitive, he also pointed out that both external and internal factors affect them. “The cost of energy and capital is high in Ghana and not favorable for us but we don’t need to focus on that alone to succeed, but we also need fairness. If the cost of imports for our competitors is low and our cost of production is high, how can we be competitive?”
He views the decision of government to reverse the benchmark value as nothing new, “we are only going back to what was formally practiced.”
The government introduced the benchmark policy in 2019 in accordance with the World Customs Organization’s policy of regular review of valuation database.
Under this policy, certain commodities are benchmarked to the prevailing world prices as a risk management tool, to reflect the true market dynamics of these commodities.
The government is however expected to implement the much-talked-about reversal of the 50 percent benchmark value on imports today, Tuesday, January 4, 2021.
This was announced by the Ghana Revenue Authority, GRA, in a press statement issued on Sunday, January 2, 2021.
However, importers in the country are still opposed to the policy, saying it will adversely affect their operations.
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