The Ghana Revenue Authority (GRA) has chosen to dance around the GH¢3.9 billion import duty impasse between it and the Ghana Cocoa Board (COCOBOD).
It has refused to provide details, despite seeking to debunk reports saying it is auctioning some agrochemicals, fertilizers, and other inputs due to COCOBOD’s inability to pay duties on the items.
The Herald, had last week reported about the dire financial situation COCOBOD finds itself as agro products, essential for the upcoming cocoa season, are being auctioned due to a failure to pay a staggering GH¢3.9 billion in duty to the GRA.
This development could have profound implications for the upcoming cocoa season, as agrochemicals, fertilizers, and implements are vital for disease control, pest management, and overall yield enhancement in cocoa farming.
Interestingly, while COCOBOD had remained silent on the matter, GRA, has been quick to react and described the reports as disingenuous and misleading urging Ghanaians to disregard it.
GRA in its statement, however, acknowledged that “some agrochemicals and other items were imported into the country by COCOBOD adding these items overstayed at the State Warehouse and as a result, were sent to the Uncleared Cargo List (UCL).
The GRA revealed that “the items were gazetted as the law demands. However, because the agro products are essential commodities needed for effective running of the operations of COCOBOD, they were not allocated to a different entity. As such, although the containers were under UCL, GRA carefully considered the request from COCOBOD and the key role it plays in the economy of Ghana and restored the items to them.”
Despite reports to the contrary, the GRA insisted that COCOBOD has since “paid the required duties on the agrochemicals” and has therefore not auctioned any products. The state revenue collected however failed to provide details on how much was paid by the COCOBOD to have the items cleared.
Further contradictions arose as GRA claimed the products were imported by COCOBOD, while The Herald contends that private companies engaged in transactions with COCOBOD carried out the imports. This business arrangement involves COCOBOD obtaining agro-inputs, including chemicals, fertilizers, and farm equipment, for distribution to Ghanaian cocoa farmers.
Notably absent from GRA’s statement was any discussion of the recent amendment to importation laws mandating duties on agro products, leading to the staggering GH¢3.9 billion duty and the ensuing impasse.
The Herald’s investigation revealed that supply contracts initially CIF to Tema left COCOBOD unable to fulfil payment obligations to suppliers, resulting in the abandonment of goods and subsequent auctions by Customs.
The exorbitant duty demanded by GRA, made the goods unaffordable for both suppliers and COCOBOD, further complicating the resolution of this dispute. The Herald’s information is that plans were being made to return to Parliament and get the law amended again to have the import duties on the agro-product abolished.
The Herald reported that the supply contracts, which were Cost, Insurance, and Freight (CIF) to Tema, saw COCOBOD, unable to fulfil payment obligations to suppliers, leading to the abandonment of goods and subsequent auction by Customs. The exorbitant duty demanded by GRA has rendered the goods unaffordable for both suppliers and COCOBOD.
These uncleared goods, including agrochemicals, fertilizers, and implements, are crucial for disease control, pest management, and overall yield enhancement in cocoa farming.
With the products stuck at the port, concerns are rising about the potential impact on agronomic practices, resulting in low cocoa yields and reduced revenue for the Ghanaian economy.
The predicament was first reported by The Herald in July 2023 government’s withdrawal of tax exemptions, demanding that COCOBOD pay import duty on all its imports into the country.
Consequently, the board struggled to fulfil its payment obligations to suppliers, leading to the abandonment of goods, including 73 containers of agro products, at the port of Tema.
The GRA’s exorbitant duty demands have rendered these products unaffordable, pushing COCOBOD into a dire financial situation.
The auction of these critical inputs raises concerns about the potential impact on agronomic practices, with fears of low cocoa yields and reduced revenue for the Ghanaian economy.
Efforts by COCOBOD’s management to reverse the tax exemption withdrawal, have allegedly been acknowledged by the Ghanaian Parliament. However, the timeline for implementation remains uncertain, leaving the fate of the auctioned goods hanging in the balance.
In a bid to address financial challenges, COCOBOD recently extended an invitation to holders of its short-term debt securities to exchange them for longer-term debt securities.
The restructuring effort indicates the institution’s broader financial struggles.
The International Monetary Fund (IMF) is reportedly supporting economic reform programs by the Akufo-Addo government to address COCOBOD’s losses. The successful implementation of these programmes is crucial for the disbursement of the $3 billion IMF bailout, with the first instalment of about $600 million already received.
Amid the financial turmoil, COCOBOD, through Calbank, announced the launch of a debt securities exchange programme. This programme invites holders of short-term debt securities (Cocoa Bills) to exchange them for longer-term debt securities (Bonds). The reasons for this exchange programme were outlined in a letter from the chief executive of COCOBOD dated July 11, 2023.
COCOBOD’s financial challenges extend beyond the duty dispute, with reports indicating overstaffing and difficulties in paying for services rendered. The board has been under scrutiny since its move under the Ministry of Food and Agriculture in 2017, repeatedly making losses with a debt burden reaching around GH¢16 billion.
As stakeholders closely monitor these developments, the Finance Minister, Ken Ofori-Atta, recently announced a programme to restructure COCOBOD’s debt.
The unfolding situation highlights the delicate balance required to ensure the stability of Ghana’s crucial cocoa sector. Stakeholders are advised to carefully review the Exchange Programme documents for further details and seek professional advice before making investment decisions.
We’ve not auctioned COCOBOD’s agrochemicals, fertilizers – GRA
The Ghana Revenue Authority (GRA) has debunked reports alleging that it is auctioning some agrochemicals, fertilizers, and other inputs due to COCOBOD’s inability to pay duties on the items.
GRA described such reports as disingenuous and misleading. It urged Ghanaians to disregard the report.
The GRA in a statement read “Management of the Ghana Revenue Authority (GRA) has sighted a publication in the Herald newspaper on “GRA auctioning COCOBOD’s chemicals, fertilizers, others” dated 2nd February 2024.
The said article states that Ghana Cocoa Board (COCOBOD) is unable to pay import duties on some agrochemicals, fertilizers and implements to be used in the enhancement of cocoa farming and this has led to an auction of these items by GRA resulting in dire implications to the cocoa season.
Management would like to use this opportunity to state that, this article is disingenuous and misleading and seeks to draw conclusions not founded on facts.
The facts are that in April and May 2023, some agrochemicals and other items were imported into the country by COCOBOD. These items overstayed at the State Warehouse and as a result, were sent to the Uncleared Cargo List (UCL). Thereafter, the items were gazetted as the law demands. However, because the agro products are essential commodities needed for effective running of the operations of COCOBOD, they were not allocated to a different entity. As such, although the containers were under UCL, GRA carefully considered the request from COCOBOD and the key role it plays in the economy of Ghana and restored the items to them.
COCOBOD has therefore paid the required duties on the agrochemicals. No agro product of COCOBOD has therefore been auctioned.
We therefore entreat the general public to disregard this false publication and to verify any such information before publication. We further state that GRA recognizes the contribution of COCOBOD to the development of the country and will therefore not carry out any action that is detrimental to its operations while at the same time ensuring that the Tax laws are applied fairly.
Management of GRA wishes to assure the public that we are committed to our mandate of revenue mobilization with integrity, fairness and professionalism.