Lack of incentives impede exporters’ desire to take advantage of COVID-19

Some exporters and shipping service providers at the forum

Exporters looking to take advantage of disruptions in supply chains in Europe and America due to the Coronavirus pandemic are worried about the unavailability of enough funds and incentives to scale up production.

According to these exporters, the state of the pandemic in Ghana offers a unique opportunity for government to introduce some incentives to propel the export of fast moving consumer goods to Europe and America.

Some members of the Vegetable Exporters and Producers Association of Ghana (VEPEAG) in an interview with the B&FT said government must urgently organise a meeting with players in the aviation sector to deliberate on ways to bring down freight cost and introduce some measures to support the export of more produce to Europe and America to fill the gap that has been created due to the effect of COVID-19 on Asian countries especially India.

The President of VEPEAG Felix Kamassah, said: “India is not exporting vegetable produce to Europe and America because they have a serious challenge with their ability to feed themselves due to the outbreak of COVID-19. Ghana has the opportunity to fill the huge gap created but the cost of freight is our major impediment.

We would be very happy if something is done about freight. For example, if you are sending goods to UK, British Airways is taking US$2 per kilo, Turkish Airline takes US$1.50 per kilo. We are pleading with the government that if they can look at the freight issues, we can be sending more produce and rake in more foreign exchange because we have the capacity to produce more here in Ghana.”

He pointed to research conducted by the association, that shows that 90 cent or US$1 per kilo as freight would be fine to support the growth of the various players.

“Since the advent of COVID-19 a lot of buyers are moving to Africa. We are getting a lot of orders and we can guarantee the volume for the cargo. We need government to help us with some incentives: at least a designated flight to Europe and America, on Tuesdays and Fridays and I believe my members would prepare to meet the timelines.”

For him, the country is also geographically well position to beat competition from other African countries that export to Europe and America. “It takes just some five hours to get to Europe from Ghana. Unlike East Africa, it takes 11 hours to get to Europe from Kenya but they are exporting more to Europe than us.”

Executive Secretary of the Food and Beverage Association of Ghana, Samuel Ato Aggrey also told the B&FT in an interview that: “we are in a good position to export more of our goods and get the needed foreign exchange to stabilise the cedi but we are not able to do that because there is little effort from government to help us. Coming by funds to inject into our operation is not that easy so we have been thinking of some means to attract funding to upscale and export more, one that came to mind is an export rebate.

If we export goods of a certain quantity and we get a rebate, it would serve as some form of incentive. We are confident that this would help to make our operation less expensive when we export to America and Europe. If this happens we would be attractive to the commercial banks and we would not have to stress to get funding for our operations.”

The interviews were on the back of the Ghana Shippers’ Authority’s (GSA) 7th Exporters’ Forum held for exporters and shipping service providers operating at the Kotoka International Airport (KIA). The forum was to shed light on ways exporters and shipping service providers can enhance their operations.

The shipment of products in substandard packages was one that also came up forcefully. According to the facilitators from the Ghana Export Promotion Authority (GEPA), no matter the support provided to exporters, if substandard packaging continues, it would expose cargo to damage during handling as well as make the product unattractive on foreign shelves. They were also encouraged to use appropriate trucks with required temperatures to ferry perishables to the airport for shipment.

The event was held on the theme ‘The Utilisation of Appropriate Logistics for safe and secured Exportable Products at KIA’. This event followed previous fora organised by the GSA for exporters in Tamale, Accra, Takoradi, Kumasi, Somanya and Bolgatanga

Some shipping service providers and exporters appealed to the Ministries, Departments and Agencies (MDAs) operating at the KIA such as the Ghana Revenue Authority (GRA)-Customs Division, Plant Protection and Regulatory Service Directorate (PPRSD), Narcotics Control Board (NACOB) and the Ghana Standards Authority (GSA) to streamline their activities to ensure timely regulatory compliance to avoid delays.

In a welcome address, the Chief Executive Officer (CEO) of the GSA, Benonita Bismarck said the authority recognises the need to equip shippers with information, knowledge and capacity to gain competitive advantage in international trade, hence the organisation of regular workshops to educate and sensitise them on issues of importance in the industry.

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