Gov’t gets tough on reviving textiles industry …approves Tema Harbour as only port of entry for textiles

The Ministry of Trade and Industry has named Tema Harbour as the only port of entry for imported textiles, as part of a chain of measures by government to curb smuggling, tax evasion and piracy.

Other measures include a tax stamp policy, which will see physical stamps affixed on both local and imported textiles, including the provision of a special stamp for existing stock, or old stock for traders, whilst government is to open direct negotiations with foreign producers to establish manufacturing base in the country.

The new directives, according to Minister of Trade and Industry Alan Kyerematen, are to among other things, ensure that the right duties due the state are paid, prevent counterfeiting and importation of pirated and sub-standard wax prints and to ultimately provide a timely lifeline for the once buoyant local textile industry.

“In the early 1980’s, the local textile industry employed over 30,000 people with over 15 major producers but as I speak, only three of these companies are left,” he said, adding that one of the reasons this has occurred is because of the influx of pirated sub-standard imports.

He mentioned that data from the Ghana Revenue Authority indicate that majority of the pirated textiles – those for which duties are not paid, come into the country through the Aflao boarder.

Because of this, he said the prices of these products become cheaper, making it very difficult for locally produced textiles to compete favourably, hence the need for government to sanitise the industry.

The textiles of the three main local manufacturers –Akosombo Textiles Limited (ATL), Printex and Tex Styles Limited (GTP), account for just 23 percent of the 120 million yards per annum of textiles consumed in the country.

ATL, the only one out of the three that produces the grey cloth —the processed cotton on which the printing is done on—as of last year was operating at about 40 percent of its 2 million yards per month capacity and has laid-off over half of its 2,000 employees as a result.

“As a government, we have a dual responsibility of ensuring that we have reasonable prices for products in the country and at the same time, we protect our local manufacturers and the jobs that they create.

“So as a result, we have come to a number of reforms; one which is the introduction of tax stamps. These stamps are intended to be a physical identification stamps to enable us determine products that are coming in have genuine designs and also to able tell which manufacturer it is coming from.

“The stamps do not attract an additional cost. It is only meant to help us determine products and also to ensure that the right duties are paid,” he said.

He added, “The second one is the introduction of a single corridor. What happens with a single corridor is that you will have a dedicated effort at ensuring that products imported are well policed and that the right duties are paid and that they are not pirated. This is not new; it has been introduced in the past before and we believe it will help us to solve the problem.

The third directive will see traders with old stock given a different coloured tax stamp to be affixed on old stock; this is to ensure that these traders are not affected during verification exercises.”

The minister, who spoke at a sensitisation exercise with textile traders in Accra, said the event was to ensure that all stakeholders – manufacturers, traders and importers come to some understanding on the need for a new set of reforms aimed at revamping the industry.

Although not all the announcements went down well with traders, the minister was emphatic that the government will not budge on its desire to provide a level playing field for local producers to compete.

For instance, the traders argued restricting them to only the Tema Harbour could increase their cost of doing business. They also said they have been paying taxes whenever they bring in textiles through the Aflao border.

“My main problem is that they are asking us to send our goods to Tema Harbour whenever we buy from Togo. I do not know how I will take the goods there and who is going to cover that extra cost of transportation?” asked Veronica Agbodo, a textile trader at Makola.

She said one of the reasons people smuggle textiles is because of high duties, and that it was rather important the government considered a downward review of duties so as to encourage more traders and importers to use the right routes and pay the right taxes.

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