By Juliet ETEFE
Chief Executive Officer (CEO)-Association of Ghana Industries (AGI) Seth Twum-Akwaboah has expressed concern over underutilisation of local production capacities – urging stronger enforcement of trade policies to create a level playing field for domestic manufacturers.
Speaking in an interview, Mr. Twum-Akwaboah highlighted that despite having the capacity to produce various goods such as cables, diapers and oils, the country continues to rely heavily on imports for these products.
He emphasised the need for more robust measures to promote local production, which is crucial for job creation and economic growth.
“We have adequate installed capacity to produce several products locally, and in many cases we even have excess capacity. Yet we continue to import these products, which undermines our local industries.
“Our concern as AGI is how to address this situation, because producing locally allows us to expand our economy and create jobs,” he told media during an AGI engagement with finance minister Dr. Mohammed Amin Adam.
The AGI CEO pointed out that while the country has some good policies in place, the challenge lies in their enforcement; hence calling for a stronger surveillance system and establishment of a task force to ensure compliance with trade regulations.
“If we can create a level playing field, our companies can compete effectively despite the macroeconomic challenges they face – such as high capital costs, inflation and energy prices,” he noted.
He further underscored the importance of collaboration between industry players and government to develop policies that support local production and economic growth. He emphasised that fairness in trade is crucial for the survival and development of local industries.
“We are not asking for outright bans on imports; we want fairness in trade. If there’s fairness in trade, and if we work on reducing production costs, our industries will be able to compete effectively,” Mr. Twum-Akwaboah stated.
Dollarisation
For his part, finance minister Dr. Mohammed Amin Adam cautioned the businesses against dollarisation as it is causing exchange rate volatilities in the economy.
He noted that this action is not helping the exchange rate regime as it is causing instability of the cedi. As such, he urged manufacturing companies to desist from such acts or risk incurring the ministry’s wrath.
“Just as we have good corporate citizens, we also have bad ones. For example, some companies sell and collect cash. When they are done, they take the cedi and convert it to dollars and keep it in the banks – and that contributes to the forex problem we have been talking about. We need to check that, because the day we start going after them the AGI will say we are harassing their members,” he said.
He noted that: “One company went and placed US$50million in the bank and didn’t have anything in cedis – and that alone took the cedi’s depreciation down by GHȼ2. When it was GHȼ13 the money went up to about GHȼ15 to the dollar because of US$50million dollars placed in one bank. So, these are all contributing to the cedi’s depreciation – which is bad”.
In response, Mr. Twum-Akwaboah assured that the association upholds high ethical standards and will not hesitate to take action against any company found engaging in such practices.
He further called for greater stability in the macroeconomic environment, particularly in terms of exchange rates and interest rates.
He also highlighted the importance of policies that support access to capital for businesses and advocated for reforms in the tax regime to alleviate the burden on local industries.
