To protect or not to protect …Gov’t, AGI in disagreement
Government favours supporting local industries to be competitive rather than protecting their markets from foreign entry, Rashid Pelpuo, Minister of State in charge of Public-Private Partnerships, has said
Mr. Pelpuo told council members of the Association of Ghana Industries (AGI) at a meeting with a visiting American business delegation that no business person should call him to ask for protection.
“I want to take this opportunity to call on Ghanaian companies to keep developing themselves. Don’t call me and say ‘protect us’,†he said.
“What we can do for you is to create the needed conditions for you to strengthen your capacity to be able to access capital, produce efficiently and be able to benefit from the transfer of technology from your partners outside so you can produce quality goods and compete efficiently,†he added.
However, in an interview with the B&FT after the event, Nana Owusu Afari, President of the AGI, said industries have a different “outlook†on the matter, since a certain level of protection for Ghanaian businesses is needed to even-out the playing field.
“People who are exporting to Ghana are getting a lot of facilities at 2% and 3% rates of lending. How much are we paying here? 30%. Unless we have been able to bring down these rates so that we have a level playing field, you cannot say that you won’t protect Ghanaian industries,†he said.
“For instance, in the oil and gas area; how long has it been since we discovered oil and gas? About five years now. Can you say that a Ghanaian going into the oil and gas industry can compete with somebody who has been in the industry for the past 30 years?â€
The manufacturing and agro-processing industries, he said, have been particularly vulnerable, with all forms of foreign goods, mostly inferior in quality, crowding out local ones.
The country’s enviable manufacturing industry, he said, is another area that could be forced out of business in view of the influx of often fake drugs and products from all parts of the world.
“There is need for a certain level of protection so that we can all come up,†he said.
Various segments of the local manufacturing industry, including textiles, furniture, as well as rice and poultry farmers, have long been calling for protection against the influx of cheap foreign goods, particularly from the Far East.
As far back as 2005, the Industrial and Commercial Workers Union of the TUC raised serious concern over the matter, saying in a press statement that "the influx of foreign-made goods into our market has for a long time now created an unfair competition with locally-produced goods. This has adversely affected our local industries -- leading to retrenchment of workers, low salaries and wages, and shutdown of factories."
Government has however been careful not to ruffle feathers in quarters where liberalisation is favoured, as measures like restoration of the 5% import levy on poultry and textiles, the re-introduction of airport tax and certain import duties on rice, wheat and cooking oil, as well as the increase in withholding tax on foreign service providers to 15 percent have been tagged as protectionist by some countries.
By Basiru ADAM
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