Beverages Association complain about high tarrifs

Centre spread,March 27, 2010
Story: Emmanuel Adu-Gyamerah

MEMBERS of the Beverages Association of Ghana have painted a gloomy picture of the cost of doing business in the country as against neighbouring countries, and called on Parliament to intervene to promote the country’s quest to be the gateway to West Africa.
They noted that the present high tariff regime on imports was gradually forcing them to reduce their imports, explaining that the situation would eventually prevent the government from meeting its revenue targets while high tariffs would be passed on to consumers.
At a meeting with members of the Trade, Industry and Tourism Committee of Parliament they expressed concern about the re-introduction 20 per cent import duty on rice, saying the argument that reintroduction would increase government’s revenue was not automatic.
A member of FABAG, Mr John Awuni, stated that the increasing revenue from imports or taxes depended on demand and supply, which eventually dictated whether more or less products would be imported.
Comparing rice imports to Ghana and Cote d’Ivoire, Mr Awuni disclosed that while Ghana imported 305 metric tonnes of rice in 2009, Cote d’Ivoire imported 950 metric tonnes during the same period.
He said that was so because importers found it cheaper to import rice into Cote d’Ivoire rather than Ghana as a result of Ghana’s high tariff regime.
Mr Awuni explained that while the total tariff on imported rice in Cote d’Ivoire was 12.5 per cent, that of Ghana was 37 per cent of the CIF.
He added that what made the situation even more serious was that large quantities of the imported rice into Cote d’Ivoire found their way through smuggling to Ghana to the detriment of importers of rice.
Mr Awuni said that the situation was not peculiar to rice imports alone, adding that by reducing tariffs, the importers could boost government’s revenue and job creation efforts while consumers welfare would be guaranteed, as low import cost would ultimately reflect in the final price of the commodities.
He also expressed worry about handling of goods at the Tema Port and wondered why only one company had been made to take charge of the handling.
Mr Awuni said what also made doing business in Ghana difficult as compared to Cote d’Ivoire was the lack of rail transport, which made haulage of bulk imports via trucks laborious and expensive for importers.
“It is not just the global financial melt down but largely because of handling and many other issues at the port which tend to increase transaction cost and, consequently discourage business persons from patronising Ghana’s ports”.
He said while in 2008 the Tema Port authorities recorded eight million metric tonnes transit cargo, the figure reduced to five million metric tonnes in 2009.
Mr Awuni said it was a fact that revenue from transit cargo constituted about 20 per cent of Ghana’s revenue and hence a decrease in transit cargo constituted a significant loss of revenue to the government.
Another member of the association, Mr Sam Zocca of the Forewin Ghana Limited, importers of wine, expressed concern about the smuggling of alcoholic beverages into the country and attributed that to high import duties.
He explained that while in 2008, his company imported 67,912 cartons of wine into the country, only 20,976 cartons were imported in 2009 due to an increase in the import duty in 2009.
Mr Zocca, therefore pleaded with Parliament to impress on the government to reduce tariffs on imports since the situation was doing the country more harm than good.
The chairman of the committee, Alhaji Amadu Sorogho, who is also the Member of Parliament (MP) for Abokobi/Medina, assured the association that their appeal would be studied for the necessary recommendations to be made.