FABAG cautions government against ECOWAS tariff harmonisation
The Food and Beverages Association of Ghana (FABAG) on Thursday appealed to government not to implement the proposed Economic Community of West African States (ECOWAS) tariff harmonisation until neighbouring countries were ready to do so.
“Should Ghana implement the ECOWAS harmonised tariffs, which are increases on existing tariffs for rice and poultry products before actual implementation by countries bordering us, existing regional distortions will be accentuated and trade in Ghana will suffer to the detriment of the economy.”
The appeal was made in a press statement signed by Mr John Awuni, a member of the association and copied to the Ghana News Agency (GNA) in Accra.
FABAG, however, commended Vice President John Dramani Mahama for announcing that government would review the bonded warehouse system, which Dr Kwabena Duffuor, Minister of Finance and Economic Planning announced its abolishment in the 2011 National Budget Statement.
Government has proposed to increase and implement the harmonised ECOWAS tariffs on rice, poultry products and sugar in the 2011 National Budget Statement, which ECOWAS member countries proposed to implement in terms of import taxes.
Mr Awuni said although FABAG was not against government’s implementation of taxes to generate more income, rice production in the country was woefully inadequate to satisfy the demands of Ghanaian consumers and so such increases would have negative rippling effects on consumers.
He said Ghanaians consumed more imported rice than the local product due mainly to availability, reliability and high quality.
Mr Awuni noted that the tariffs could create rice shortage as importers would be compelled to sell at much higher prices.
“Already, Ghanaian rice importers are paying higher taxes even to the tune of 40 per cent as compared to her neighbours and the implementation of the harmonised ECOWAS tariffs will further raise it to over 50 per cent which will not only encourage smuggling from neighbouring countries, but will also cause price hikes, create shortage of the commodity and unemployment.”
Mr Awuni said apart from using the bonded warehouses Togo, Burkina Faso and La Cote d’ Ivoire, also counted on import tariffs less than 30 per cent, which encouraged a lot of people in Ghana to smuggle the commodity.
He said the implementation of the tariffs would further widen the gap and create economic hardships for Ghana.
Mr Awuni recommended to the government to maintain the bonded warehouse system with shorter limits of time spanning six months and one year.
He also appealed for the maintenance of the current duty tariffs until all neighbouring countries raised their taxes at par and continue to dialogue with stakeholders for increased and improved revenue collection.