Benchmark value policy introduction has been abysmal – AGI

Vice President of the Association of Ghana Industries (AGI) in charge of SMEs, Humphrey Anim-Dake, has described the 50% benchmark value policy introduced in the country as inimical to the growth of manufacturing businesses.

According to him, local manufacturing is collapsing due to the influx of “finished imports” equally enjoying 50% reduction in their benchmark value.

Mr. Anim-Dake explained that some of these imports to Ghana already enjoy “significant export rebates” from their countries of origin, as a result of privileges they are already enjoying

The situation, Mr. Anim-Dake noted, is further worsened if imports of finished goods are not registered and “captured under V80”. This, he explained, leads to importers “upselling” their products in the local markets without charging any “frontend V80 levies”.

“The concern of AGI is that the benchmark value policy that was introduced within the set period has been inimical to manufacturers, specifically between the agrarian business and the value addition processes within our manufacturing space… Locally manufactured products including those for which Ghana already has local production capacity and comparative advantage have been under serious threats from imports” he said.

Commenting on the oil palm industry, the AGI Vice President indicated that the influx of cheaper imports is making local production “highly uncompetitive” thereby discouraging investment in the affected sectors.

Mr. Anim-Dame asserted that the reduction in the benchmark value of imported and refined vegetable oil will discourage potential investors for the oil palm sector.

“Ghana cannot become a net export of crude and refined palm oil product to further increase its foreign income reserves. Ghana will need about GHC100 million to import crude palm oil annually if this policy persists”.

Exempt imported products from policy

Following this, the AGI has urged government to exempt sectors such as agribusiness, pharmaceutical and heavy industry from the policy.

“Instead of the universal application of the policy to all imports, AGI believes imports which come to compete with locally manufactured products be exempted from the policy. It is important for government to cushion local products for which there is local production capacity. Secondly, we urge government to maintain the benchmark policy for manufacturers that import raw materials to help grow the real economy” he indicated.

In 2019, government declared a 50% reduction on import values at the ports to ensure trade through the ports are more attractive as well as a boost for revenue mobilization. With this, Mr. Seth Twum-Akwaboah, Chief Executive of AGI intimated that these expectations have not been met in two years into its implementation.

He explained that some agreements such as duty-free quota-free clauses have made it more crucial to support industry with the “right policies” in order to scale up local production capacity.

Mr. Twum Akwaboah iterated that the Association isn’t calling for a total scrapping of the benchmark policy but rather demands a “selective application” of the policy with regards to imports in order to serve the needs the Ghanaian economy. He indicated that a review of the policy must be undertaken within the scope of an “industrial transformation agenda and fair trade practices”.