Create enabling environment for industrial growth, not reversal of benchmark value – GUTA
Dr Joseph Obeng, President of the Ghana Union of Traders Association (GUTA), has reiterated the call on the government to create enabling environment for local industries to produce at cheaper and competitive prices and not the reversal of the benchmark value policy
He said the high cost of borrowing, capital acquisition, lack of modern production technologies, and utility were major factors hampering the growth of local companies and not the benchmark value policy.
Dr Obeng in an interview with the Ghana News Agency in Accra on Tuesday, said, once those challenges were addressed, local industries would be able to produce at cheaper and competitive prices, which would discourage the Ghanaian trader from importing.
He, therefore, advised the Association of Ghana Industries (AGI) to “push the government to create this enabling environment by solving these problems that militate against the growth of industries.”
His call comes in the wake of the reversal of the benchmark value policy on 43 imported items, which he said, would make traders incur high cost in clearing their goods, and pass on such costs to consumers who were “overburdened.”
The AGI President-Elect, Dr Humphrey Ayim-Darke, urged the government to step up with interventions like the Planting for Food and Jobs (PFJ) that provided inputs for industries.
Additionally, he said, the government should help industries in the areas of high cost of credit, and taxes, including Value Added Tax (VAT), and be resilient in implementing the reversal of the benchmark value policy.
He noted that although raw materials for production benefited from the 50 percent discount benchmark value policy, the policy eroded all the margins and advantages of production.
“It’s [benchmark value policy] not in favour of production. It gives retailers the upper hand to import goods and sell…,it makes us uncompetitive,” he said.
Dr Ayim-Darke, said the reversal of the benchmark policy and prudent management of factors, including taxation, power and other production costs would “revive the competiveness of our production line.”
He said the implication of the reversal of the policy was that, “it will scale up production, create more sustainable employment and it will help the government rake in taxes and balance its books.”
The AGI President-Elect insisted that Ghanaian industries had the capacity to scale up production to meet market demands once there was a policy that was consistent with production and the country’s developmental paradigm.