The Director of the University of Ghana’s Institute of Statistical, Social, and Economic Research (ISSER), Peter Quartey, has urged the government to be resolute in deciding on a benchmark policy that favours and supports local manufacturers rather than giving importers an edge.
His remarks follow the Ghana Union of Traders Association’s vehement opposition to the government’s decision to reverse the up to 50 percent benchmark value it applied to the importation of some products. That was primarily intended to reduce the duties importers pay in order to increase the volume of goods passing through the country’s ports.
In his view, the matter should be examined based on statistics and how it has affected the economy thus far, particularly with regard to local production, as he believes domestic production should take precedence over importation.
“I think the issue of benchmark values should be looked at again with data. Government thinks there are some products that the benchmark values should be taken off to encourage local production. And there are also several imported products that the benchmark value has to remain on.
“The AGI and GUTA should sit down and look at the data again and speak to data, because this benchmark policy is really killing local production. We cannot continue on that trajectory. Where there is sufficient local production, the benchmark should be taken off so that local products can compete with imported products. Otherwise, you are giving imports undue advantage, and that isn’t going to augur well.
“With the Africa Continental Free Trade Area (AfCFTA), if imported products from Europe and Asia become cheaper than what is produced on the continent, it will kill that initiative,” he said in an interview with the media.
The benchmark value policy was implemented in 2019, but the government has since reversed course in response to repeated complaints from local businesses, who claim that the policy has resulted in unfair competition from imported products, resulting in lower output and the near-collapse of some manufacturing businesses.
Despite the concerns expressed by local producers, the government has put the policy’s reversal on hold to allow for more consultations among stakeholders, following importers’ outcry over current port charges, which they claim will result in more hardship for citizens as prices of goods rise dramatically.
The Association of Ghana Industries (AGI), on the other hand, believes that government should prioritise developing the local economy by assisting manufacturers, as this will provide jobs for the youth while also generating cash for the government.