Trade expert backs gov’t to scrap benchmark policy

International Trade Consultant with Blackbridge Consulting Ltd, Maame Awinador Kanyirige, has backed the move by government to scrap the benchmark value policy on some imported products – saying it will promote the patronage of local goods and help local companies become competitive on the continental export market.

In an interview with the B&FT, Ms. Kanyirige made a strong case for local producers; especially at a time that the African Continental Free Trade Area (AfCFTA) is in full force, requiring local companies to be strengthened in order to match up to their foreign counterparts.

For her, one way to give local manufacturers advantage is to slap taxes on imported products that are in competition with locally produced goods, as this will give the latter an advantage in pricing. She cited India as setting a good example in this regard when it wanted to promote its automobile industry.

“Reversing the benchmark policy is actually beneficial for local production because it is going to increase the cost of imports, and this will move people to patronise locally produced goods. And it is going to help with the AfCFTA, because the goal is to help Ghanaian traders export locally-produced goods on the market.

“One of the major things any country that is trying to develop does is try to increase the cost of inports. So, for example, when India wanted to boost its automobile industry, it increased the cost of imports on foreign-produced cars so that people could patronise locally produced cars.

“So one of the ways that the AfCFTA will become effective is to increase the cost of imported goods, so that it will help local consumption and the whole goal of exporting locally produced goods out of Ghana will be in effect. This policy will not affect parties to the AfCFTA agreement because there are provisions for countries that are parties to it. What it will really do is that it will help local producers,” she said.

Her call comes after the Ghana Union of Traders Association (GUTA) expressed vehement opposition to the decision by government to reverse the up to 50 percent benchmark value it applied on the importation of some products, which was primarily aimed at reducing the duties importers pay in order to increase the volume of goods that come through the country’s ports.

Following this, government has put on hold its implementation of the policy-reversal to allow further consultations among stakeholders, following importers’ loud cry over the current charges at the ports – which they say will consequently lead to more hardship for citizens, as prices of goods will see an astronomic rise.

However, for the international trade consultant, such reasons are not enough to withdraw reversal of the policy as this will not move the country away from being an import-driven economy to an export-driven one that creates jobs.

“There is a realisation that we rely heavily on imports; so, of course, some traders will be disappointed. But despite this, it will help us to become more independent as a state and we will move away from relying on raw materials to become a value-added economy. So, it is a necessary policy because, in the long-run, it will make us self-reliant.

“Attached to this policy, government must ensure that it does more to make producing locally cheaper – and not just make imports expensive – so that there is proper competition on the market,” she said.