Trade associations in Ghana, representing businesses in the manufacturing and import sectors, have expressed reservations and highlighted potential challenges regarding the proposed LI “Export and Import (Restrictions on Importation of Selected Strategic Products) Regulations, 2023.”
While commending the Ministry of Trade and Industry for public consultation, they insisted that the proposed list of 24 goods, subject to import restrictions, significantly underplays the broader scope that such regulations could cover.
They emphasized the complexity and challenges that administering a permitting process for such a wide range of goods would pose to the private sector.
Members, include the American Chamber of Commerce in Ghana (AMCHAM), UK-Ghana Chamber of Commerce (UKGCC), Chamber of Commerce and Industry France Ghana (CCIFG), European Chamber of Commerce in Ghana (EUROCHAM), Canada Ghana Chamber of Commerce (CANCHAM), Ghana Netherlands Business and Culture Council (GNBCC), Ghana South AfricaBusinessChamber (GSABC) and Spain Ghana Chamber of Commerce (SGCC).
They raised concerns about potential distortions to competition that could arise from the government choosing importers, deviating from international trade norms and argued that the proposed measure, focusing on a limited list, fails to consider the practical aspects of international trade and how businesses plan their operations.
In the statement copied to The Herald, they insisted that “the workability of administering a permitting process, including forecasting domestic supply and demand for such a wide list of goods seems very challenging for the private sector”.
Scope of the proposed measure
The list of 24 proposed goods, minimizes the actual scope of what could be covered by the measure.
Entire chapters of the Harmonized Tariff Code, could be covered by categories such as clothing and apparel, iron and steel, motor vehicles (which may even extend to parts), plastics, etc. The measure could easily cover hundreds if not thousands of specific goods and tariff lines.
“We are concerned that at a fundamental level, the government would be choosing who gets to be importers into the country and that there are distortions to competition that flow from that break from international trade norms. Further, the measure does not take into account some practical aspects of international trade and how businesses plan their operations.
Suppliers assess and choose who they think is qualified to serve as an authorized distributor or representative in a foreign market. A committee in Ghana selecting and limiting the importers through a permitting process would distort this natural and competitive aspect of international business.
Manufacturers and processors, expressed worries about disruptions to their supply chains, citing the importance of supply chain resilience highlighted during the pandemic. They emphasized the critical role of intermediary inputs covered by the proposed regulations and how the measure could impact planning and investments in an already challenging macroeconomic environment.
Additionally, the associations drew attention to the unintended consequences observed in other countries that implemented similar measures. The World Bank’s cited consequences in Nigeria included the creation of parallel currency markets, increased inflation for covered products, trade evasion, and revenue losses from reduced trade.
Ghanaian companies operating internationally stressed the potential strain on trade relations and tensions with key partners such as the US, UK, and the European Union. They expressed concerns about the impact on Ghana’s international trade opportunities and the development of regional value-added chains.
The associations urged the government to consider alternative tools to address trade concerns, highlighting existing measures, policies, and taxes already in place for some of the products on the proposed list.
They emphasized their commitment to producing in Ghana and sourcing locally, expressing reservations about the impact of a permitting committee on competitiveness and the potential for higher production costs.
The submission concluded with a plea for the government to reconsider the proposed restrictions, emphasizing the importance of maintaining a conducive environment for local businesses to thrive and contribute to Ghana’s economic development.
