…But industry priority is on anti-smuggling measures
By Ernest KISSIEDU
Business Day Ghana understands from textile industry players that government will doll out cash as ‘Stimulus Package’ to several companies in the textile and garment sector to rescue their ailing operations.
It is understood that various firms have received questionnaires, which they are expected to fill and submit to enable government to assess who qualifies to receive these funds from government.
As such, no specific amounts have been allocated yet, but industry players have indicated the amount involved is quite substantial.
It is also not very clear the purposes for which these funds will be allocated; whether for the purchases of raw materials or equipment revamping.
Earlier this year, government announced that it has set aside over GHC100 million under the ‘stimulus package’ introduced in the 2017 budget aimed at reviving distressed companies.
Some of these local businesses and companies have struggled during the past four years under ‘dumsor’ and eventually laid-off a lot of workers at the time.
Monies from the ‘stimulus package’ are expected to be expended under what the new government calls the National Industrial Revitalization Programme.
Beneficiary companies will be selected based on a rigorous vetting process.
The fund will help to expand capacity of firms to increase production and employ many jobless young graduates.
The government is expected to come out soon with 10 key stimulus package agenda to back local business growth, boost production and power the economy to improve the living conditions of people.
Meanwhile, the Ghana Federation of Labour (GFL) has indicated that though government has shown commitment to transforming local industries through the introduction of these ‘stimulus packages’, there is the need to put in place strict measures to deal with factors that affect local businesses.
This will help to ensure that monies invested in the industry don’t go to waste.
“We aren’t against the stimulus package but we think that before these monies are released, government must make sure that they put in place measures that will check these illicit businesses that go to eventually undermine the local industry,” GFL General Secretary, Mr. Abraham Koomson, told the Business Day Ghana in an interview.
According to him, people have criticized the labour union of kicking against these stimulus packages recently but, “We aren’t kicking against it but we want government to be very concerned about the application of state or national resources.”
“Even if it’s a loan, eventually government will have to pay; and if the industries that you are investing these monies in go bankrupt because of some illicit practices, which will go against the local businesses, you can’t blame them. So, it is a caution that we are throwing out there that government should be very careful not to put in monies that will go waste,” Mr. Koomson noted.
Mr. Koomson, who is also the Chairman for Textiles, Garment and Leather Employees Union (TGLEU), mentioned smuggling, under-invoicing and non-payment of duties and taxes on goods as some of the illicit practices affecting the local industries in Ghana.
“We need measures that will check this influx of smuggled goods here. Most of the time, they don’t even pay appropriate duties or taxes to the state which also goes to mix with these goods that come from outside sell cheaper. But if they are made to pay corporate duties or tariffs to the state, it will also help the economy.
“Then there will be level playing field where those who produce theirs locally, will be able to compete. We aren’t saying they should ban it outright, but those who are importing these things should be made to pay the appropriate or adequate duties,” he said.
Citing an instance, Mr. Koomson added that, “A poultry farm project is a good business but if you put so much money there and you allow people to bring in very cheap chicken wings, legs and all that, the ordinary person will buy them, and even the rich will also buy these things for their parties and whatever functions they may have and leave the locally produced chicken. This will go against the local industry and so you end up throwing money to waste.”
Meanwhile, the Anti-Textile Piracy Task Force instated to check the high incidence of counterfeiting and smuggling of locally manufactured textile prints was dissolved last Tuesday 6th June, 2017.
The transition act or law stipulates that by 6th January, 2017, all boards must be dissolved. This ensures that all committees put in place by government cease to function.
The GFL General Secretary expressed excitement about the dissolution of the Anti-Textile Piracy Task Force by the Ministry of Trade and Industry (MOTI) saying, “This is an indication that government is committed to making sure that by the end of June, the ministry’s promise to set up or to come out with a policy document on textile imports and manufacture in this country” is delivered.
Currently, the textiles industry employs about 1,500 workers unlike in the 1970s, when the workforce was over 25,000.
The more than 130 million meters of fabric it produced has also been reduced drastically to less than 30 million.
Local textile manufacturers hold 30% of the market share whilst imported/smuggled/under-invoiced contributed 70% of this same share.
Revenue loss to the state as a result of the illicit textiles imports is estimated at GHC300 million annually.
Writer’s e-mail: ernestk@businessdayghana.com
