By Franklin ASARE-DONKOH
The National Executives of the opposition National Democratic Congress (NDC) is calling on the clergy, Civil Society Organisations, (CSOs) and other key stakeholders to publicly reject the proposed Legislative Instrument (LI) seeking to restrict the importation of some selected items into Ghana.
The proposed LI will compel importers of 22 restricted items, including poultry, rice, sugar, and diapers, among others to seek licenses from a committee to be set up by the Minister of Trade and Industry, KT Hammond.
But the NDC says the draft document currently before Parliament if passed, will lead to corruption among government appointees.
The party argued that the government does not have the domestic capacity to produce the over 22 items listed locally.
Addressing journalists during the party’s ‘Moment of Truth Series’ in Accra on Wednesday, December 6, 2022 the Minority Leader in Parliament, Dr. Cassiel Ato Forson, said, “We also call on the Trades Union Congress (TUC), Civil Society Organisations (CSOs), traditional authorities, the clergy and all progressive forces to speak up and join us to reject these obnoxious import restriction regulations, in the supreme interest of Ghana.”
He also called on the government to withdraw the regulations immediately and broaden its engagement with all key stakeholders.
“Already, importers and the business community have amply demonstrated how these regulations lack broad consultation and consensus. We therefore call on government to withdraw these regulations immediately and broaden its engagement with all key stakeholders.
A few weeks ago, executives and members of Six business associations, which will be affected by the import restrictions bill, on November 26, 2022 submitted a petition to Parliament in opposition to the proposed legislative instrument.
The groups under the umbrella name, Joint Business Consultative Forum, include the Ghana Union of Traders’ Associations (GUTA), Food and Beverages Association of Ghana (FABAG), Importers and Exporters Association of Ghana, Ghana Institute of Freight Forwarders (GIFF), Chamber of Automobile Dealership Ghana (CADEG), and Ghana National Chamber of Commerce and Industry (GNCCI).
They argued that the LI, if enacted, would have serious detrimental effects on their businesses.
Read below the statement by the NDC
MOMENT OF TRUTH PRESS CONFERENCE ON THE PROPOSED “RESTRICTIONS ON THE IMPORTATION OF SELECTED STRATEGIC PRODUCTS REGULATIONS”, HELD ON 6TH DECEMBER, 2023 AND ADDRESSED BY DR. CASSIEL ATO FORSON, LEADER OF THE NDC MINORITY CAUCUS IN PARLIAMENT
- Friends from the media, I would like to extend our warm compliments to all of you, for your presence here this afternoon.
- This engagement has been necessitated by discussions surrounding a Legislative Instrument (LI) that the Akufo-Addo/Bawumia NPP government is desperately attempting to introduce in Parliament, which has very far-reaching implications for Ghanaians.
- The said LI, the Export and Import (Restrictions on Imposition of Selected Strategic Products) Regulations, 2023, seeks to give the Minister of Trade and Industry, the sole prerogative and unfettered power to grant licenses to any person desirous of importing into the country, some essential items numbering twenty-two (22). These items are:
- Rice
- Guts, bladders, stomach and intestines of animals
- Poultry
- Frozen cuts and offal of fowl
- Animal, vegetable, coconut and palm oil
- Margarine
- Fruit juices
- Soft drinks
- Mineral water
- Ceramic tiles
- Corrugated paper and paper board
- Mosquito coil and insecticides
- Soaps and detergents
- Motor cars
- Iron and steel
- Diaper
- Polymers (plastic and plastic products)
- Fish
- Sugar
- Clothing and apparel
- Biscuits
- Canned tomatoes
- Aluminium products.
- As expected, these ill-conceived regulations have faced stiff resistance from the NDC Minority in Parliament. Indeed, we have not been alone in this endeavour, as the business community and other well-meaning Ghanaians have joined us in opposing these restrictions which clearly do not bode well for our country.
- Indeed, the Joint Business Consultative Forum, comprising reputable associations such as:
- the Ghana Union of Traders’ Associations (GUTA),
- Food and Beverages Association of Ghana (FABAG),
- Importers and Exporters Association of Ghana,
- Ghana Institute of Freight Forwarders (GIFF),
- Chamber of Automobile Dealership Ghana (CADEG), and
- Ghana National Chamber of Commerce and Industry (GNCCI)
argue that the LI if enacted, would have serious detrimental effects on their businesses.
- Let me make it clear, that in principle, the NDC is not against any legal regime or policy that seeks to protect indigenous businesses by regulating imports. What we are vehemently against, is a law that confers unfettered discretionary power on a single individual, in this case a Minister of Trade, to issue import licenses and to restrict the quantity of certain imports into the country, without any checks and balances.
- Such laws often breed corruption and cronyism, and can easily be abused to create a monopoly for some few individuals. As it is often said, power corrupts, but absolute power corrupts absolutely.
- Simply put, the proposed Import Restrictions Regulations of the failed Akufo-Addo/Bawumia NPP government, seeks to grant unchecked discretionary power to the Minister for Trade, to solely determine whether or not, to issue an import license to a person and to restrict the quantity of certain imports into the country, as he deems fit.
- The regulatory framework proposed by the LI is not only opaque, but can lend itself to arbitrariness and abuse. This clearly, is going to be an avenue for extortion and corruption if allowed to stand.
- Also, the proposed Regulations seek to impose both an application fee and a license renewal fee on prospective importers. This will in no doubt, impose an additional burden on businesses which are already wobbling under so much pressure from the several draconian tax measures and bad policies of the insensitive Akufo-Addo/Bawumia government.
- Even after one has fulfilled these requirements and paid the necessary application or renewal fees, the decision to issue or renew an import license, rests solely with the Minister of Trade, who can potentially use such unfettered powers to frustrate businesses of perceived political opponents.
- Additionally, under the proposed regulations, a Minister of Trade and Industry will constitute himself into a judge in his own cause, in the sense that the same Minister who seized with the power to grant, renew or cancel an import license, is equally clothed with the power to unilaterally determine a review application against his own decisions. This arrangement is clearly against natural justice.
- It is instructive to note that, currently, Ghana does not have any significant local capacity to produce some of the “strategic products” listed under the First Schedule of the proposed LI such as sugar, among others. Neither has the government outlined any specific interventions or incentives to promote the local production of such products. This completely belies the government’s claim that the proposed regulations are intended to promote local production of the affected products and conserve foreign exchange.
- More importantly, the proposed Regulations gravely offend some international trade treaties and protocols that Ghana is a party to. For instance, the regulations in their current form, contravene the World Trade Organisation (WTO) trade facilitation agreement, particularly on quantitative restrictions. This could lead to serious retaliatory action by our trade partners and eventually, affect exports from Ghana.
- It should be obvious to any discerning mind, that the excessive discretionary powers that the law grants a Minister for Trade, will afford him the opportunity to subject the issuance and renewal of import permits to crony or state capture. If this law is allowed to pass, a Minister of Trade will be handed a blank cheque to deny those who are not in his good books, licenses and create powerful trade cartels who will monopolise the importation of these essential commodities. This has the potential to create supply disruptions and shortages of certain goods in the economy with its concomitant effects on inflation.
- The NDC holds the view that the right to import essential commodities into the country cannot be limited to the whims and caprices of a Minister of Trade and Industry, his deputy or a certain Import Permit Committee, which will be constituted by the Minister under Regulation (2) of the proposed regulations.
- The alternative view of the NDC on this matter is that:
- Where credible data exists to show that Ghana has adequate domestic capacity to produce a particular product, or where the consumption of a product has been proven to be injurious to public health or safety, government can simply place a ban on the importation of such products into the country.
- However, where a particular product has not been proven to be harmful to public health or safety, and there is no credible data to show that adequate domestic capacity exists to fully meet the demand for that product, government can regulate the importation of that product in two main ways:
I. One of the ways is to introduce a transparent quota system for the importation of certain products, as was done by the erstwhile NDC/Mahama administration in the poultry sector.
A quota system requires a prospective importer of a particular product to first show proof of utilizing existing local capacity by procuring a certain percentage of his intended import volume, locally.
When the erstwhile NDC/Mahama government realized that the local poultry industry had capacity to meet about 20% of total domestic consumption, the government introduced the 40% rule in the year 2014, which required poultry importers to purchase at least, 40% of their total stock from local poultry farmers.
This policy was implemented alongside the Ghana Broiler Project and the provision of incentives for local poultry farmers, aimed at enhancing the domestic production of poultry.
II. Another mechanism that can be used to regulate imports with the aim of protecting indigenous industries, is the imposition of tariff and non-tariff measures on certain products to encourage the patronage and consumption of locally-produced commodities.
- It is a known fact that trade volumes at our ports have dropped drastically under the failed Akufo-Addo/Bawumia NPP government due to high duties and taxes. Similarly, smuggling of goods out of Ghana to other neighbouring countries has intensified due to the porous nature of our borders. This obnoxious Legislative Instrument will exacerbate these problems and negatively impact livelihoods and the economy as a whole.
- As you may be aware, the insensitive Akufo-Addo/Bawumia NPP government is also seeking to introduce a new raft of draconian tax measures on the already-impoverished Ghanaian public, on the back of the 2024 budget which is yet to be approved.
- These tax measures which are currently before Parliament include;
i. Imposition of VAT on non-life insurance such as:
- Motor or car insurance
- Marine insurance
- Fire insurance
- Building insurance
- Goods-in-transit, etc.
ii. Imposition of 5% VAT flat rate on residential and commercial real estate. Ghanaians should get ready to pay 5% VAT anytime you buy a house from an individual or a real estate company.
iii. Imposition of VAT on:
- Textbooks,
- Exercise books,
- Newspapers,
- Publications,
- Architectural plans,
- Scientific and technical works,
- Magazines,
- Periodicals,
- Calendars,
- Trade catalogue,
- Price list,
- Diaries,
- Stationery etc.
iv. Imposition of VAT on domestic air travels.
v. Imposition of VAT on the domestic transportation of passengers by road, rail and water.
vi. Increase of stamp duty rates across board.
vii. A new Excise Duty Amendment Bill, which seeks to increase the excise duty on Cider beer from 20% to 47.5% of ex factory price.
The bill also seeks to introduce excise duty of GHS100 per annum for all petrol and diesel vehicles i.e internal combustion engines. This new tax applies to;
- Private cars,
- Trotro,
- Uber,
- Taxis,
- Motorcycles,
- Aboboyaa
- Pragyia
- Okada
- “Mahama can do”, etc.
This particular tax is regressive since all vehicles will pay the same amount of GHS100 per year whether you are using V8, articulator or an uber car.
Further more, the bill seeks to introduce excise duty of GHS100 per tonne of carbon dioxide emissions by industries.
Also contained in the bill, is a 20% excise duty on Akpeteshie.
- It is the considered view of the NDC, that the proposed import restriction regulations are regressive, counter-productive and have the potential to breed corruption just like the days of “essential commodities” and “price control”. The law is completely unwarranted and unwelcome.
- Already, importers and the business community have amply demonstrated how these regulations lack broad consultation and consensus. We therefore call on government to withdraw these regulations immediately and broaden its engagement with all key stakeholders.
- We also call on the Trades Union Congress (TUC) , Civil Society Organisations (CSOs), traditional authorities, the clergy and all progressive forces to speak up and join us to reject these obnoxious import restriction regulations, in the supreme interest of Ghana.
SIGNED.
HON. DR. CASSIEL ATO FORSON
(Member of Parliament for Ajumako Enyan Essiam and Leader of the NDC Minority Caucus of Parliament
