Leverage COVID-19 to review benchmark value to save industries – AGI

CEO of AGI, Seth Twum-Akwaboah,

The Association of Ghana Industries (AGI) has cautioned that if immediate measures are not rolled out to amend the benchmark value regime in the 2021 budget, local industries that are already suffering impacts of the pandemic will be left with dire operational conditions.

According to the AGI, as a result of the pandemic local industries are not only suffering from supply chain issues but have to fight unfair competition – as the importation of similar products they are producing here are being sold at far cheaper prices due to the advantage of reduced benchmark value for importers.

Government in 2019 announced a drastic reduction in the benchmark values against which duties paid by importers at Ghana’s ports are calculated.

The benchmark or delivery values of imports, with the exception of vehicles, were reduced by 50 percent; while that for vehicles was reduced by 30 percent. According to government, the measures were designed to reduce the menace of smuggling and make the country’s ports more competitive and attractive.

Speaking to the B&FT, the Chief Executive Officer of the AGI, Seth Twum Akwaboah said: “We are still worried about the benchmark value, especially the products that are produced here in the country.

“It is really difficult to understand why after allowing these products to be imported, we reduce the benchmark value on them. This means they are coming into the country at a cheap price and will compete unfairly with local companies who are producing similar items at a higher cost alongside the impact of COVID-19 and challenges of global supply chain.”

The AGI has been advocating for amendment of the benchmark value regime to help indigenous companies stay in business. The association maintains that the move does nothing to promote locally manufactured products, as products with competitive advantage are faced with unfair competition.

“We have issues with taxes, but the benchmark value is the most serious now. We want government to amend it in the 2021 budget. We need to make sure that we are not hurting our own. COVID-19 has taught us that we have to be a bit inward-looking, and we have to ensure we can produce some critical goods locally.

“Yes, we want to make our ports competitive, we want to allow more goods to come through so that we can get more taxes; but that should not mean we put our industries at a disadvantage. We have presented our case to the finance ministry and we want them to factor it into the 2021 budget,” Mr. Akwaboah said.

Players in the oil palm industry have over the years been vocal as to effects of the policy on their operations. They have expressed fear that the decision to maintain and continue implementing the 50 percent benchmark value on palm oil imports, for instance, is severely hampering the development of local content – collapsing businesses and leading to job losses.

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