Discriminatory policies are necessary, according to Kojo Oppong Nkrumah, minister of information, to support the development of local firms.
He claimed that the government’s decision to reverse the benchmark value of 50% in order to support local manufacturers is a result of this in part. He went on to say that the Ghana Union of Traders Association (GUTA) had rejected that action because they believed it would raise prices.
He was responding to the Chairman of the Greater Accra Regional AGI branch, Mr. Tsonam Akpeloo, who said that the lack of clear rules to safeguard local producers and excessive taxes made it difficult for the environment to support local production.
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Mr Tsonam said the solution to the challenges facing the Ghanaian economy is local production.
Speaking at the 3businesscolloquium which was also attended by President of GUTA Dr Joseph Obeng, organized by Media General on Wednesday July 6, he said “If you are an investor in New York and you want to invest in rice farming, you go to Nigeria, you don’t come to Ghana. Because Nigeria has clear policy protecting the rice farmer in Nigeria.
” In fact they have actually banned the importation of rice so, if you have money and you want to invest in rice production you don’t come to Ghana you go to Nigeria.”
He added “So, how are you going to attract a rice investor to come to Ghana? That is the situation. The situation is that, over time there is no longer incentive for people to want to really produce locally but everybody agrees that the solution to the problem facing us is local production. We need to boost local industry.
“How are we going to do that if we don’t have the right policy and the right environment. Look at the taxes, we have got Sanitation Tax and at the same time we have Environmental Levy, the same thing you are taxing us many, look at the street light tax. All of these taxes are just making the cost go up and as a result, it is really difficult to sustain proper production in our environment.”
Responding to him, Mr Oppong Nkrumah who is also Member of Parliament for Ofoase Ayirebi said “Part of the answer is that, we need to support industry to produce more, export more, bring the dollar back home, create more jobs . To do that, we need to have discriminatorily policies that favour industry.
“Even if you come to the view , and this is just hypothetical, that let us say, utility tariffs are low and therefore, you must increase, we need to find a way to discriminate it in favour of industry so that even if I have to pay a bit more for electricity, it will not necessarily push the cost of electricity higher for industry, so that their producer price points go up. [Tsonnam Akpeloo] is talking about policy environment, I agree with him one hundred per cent.
“These are the places in which we have to focus our energies to ensure we have more conducive policy environment to support local industry.
“Government proposed a policy measure in the 2022 budget. We said we wanted to take away the discounts on the benchmark values. Why? Because there were a number of items which are produced here in Ghana which we have discounted import tariffs on and we said we want the local producer to produce but [GUTA] are importers, they kicked against it and said no, it is going to end up and push prices up because they don’t have the capacity to produce and our people will go out of business.
“The policy response you want is policy that connects traders to local producers so that the kind of capital that they send to Indonesia and China and wherever to go and bring those goods, that capital can go here and ensure that production goes in because on the back of this production is a lot of local jobs and comes for our people. I believe that that is where we should channel the energy of our policy discussions.”
