The Chief Executive Officer of the Association of Ghana Industry, Seth Twum Akwaboah, has called for a review of the Benchmark Value Discount Policy.
According to him, the introduction of the Benchmark Value has been injurious to the growth and development of the local manufacturing industry leading to a contraction of the local economy.
The Benchmark Value Discount Policy was introduced in April 2019 by government in an attempt to make the Ghanaian ports competitive, reduce smuggling and increase government’s revenue from the port.
The policy provided a discount of 50% on the delivery or benchmark values of imports with the exceptions of vehicles.
Speaking on JoyNews’ PM Express, Seth Akwaboah explained that while the Benchmark Value has provided a major boost to the imports industry, it has dealt a major blow to the local manufacturing industry.
He noted that the only way the manufacturing industry could fully recover is for the Benchmark Value Discount Policy to be fully reviewed in order to provide a level marketplace for both imported and locally produced goods.
He said, “Capacity doesn’t change overnight because capacity includes fixed cost and variable cost. In the short run you can change all these factors but in the short term you cannot change fixed cost.
“So what happens is that you need to create conditions, you need to create market opportunities for the capacity to increase. If you want to wait for capacity to increase, capacity doesn’t increase in vacuum, it increases to fill a market need.
“So if you don’t create an opportunity for the market to thrive, businesses cannot really step up to the plate and increase capacity. In any case, installed capacity I believe is enough to produce so much products.”
He continued, “Of course, it’s not every product that we are self-sufficient, that is clear, but for a lot of them if you create the opportunity – what we did in the case of the benchmark value reduction was that we actually caused contraction in the industrial sector.
“And the GRA mentioned it that within the two years or so that we had it they lost 9 billion cedis in tax revenue, why because the revenue that they were getting from all these sources dwindled significantly.”
“So benchmark value reduction, the review is very important because when you review it what you do is that you create fairness in the marketplace and when that fairness is created then you’re encouraging the productive sector to put in more investment, to put in more resources and then they can create the opportunity to fill the market,” he added.
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