Business News of Wednesday, 26 October 2016
Alexander Afenyo Markin,Member of Parliament for Effutu
The Government of Ghana has been charged to provide incentives for local cement manufacturing companies to flourish just as their foreign counterparts.
Member of Parliament for Effutu, Alexander Afenyo Markin, has said although competition in the sector is good, especially in bringing down the price of the commodity, there is also the need to ensure that unfair trading practices or competition do not cripple the local businesses.
His call follows claims by the Minister of Trade and Industry, Ekow Spio Garbrah that the prices of cement in Ghana have reduced due to the competition local companies are facing from the foreign firms.
Mr Spio Garbrah recently said: “…By the time cement comes into Ghana, because of tariffs, duties, and levies and also the profit margin cement companies are putting on it, the prices tend to be in the GHS28 to GHS30 range. But between manufacturers and importers, our own view is that cement prices should keep coming down and these last few days we’ve had some news report about cement prices coming down.”
The Minister attributed the falling price of cement to competition, saying: “The manufacturers realise that there is competition.”
He said: “Dangote for example is providing a lot of competition to the Ghanaian manufacturers some of whom have had the monopoly situation for close to 30 or more years and are not used to competition and their natural reaction is to run to the media and throw a lot of dust in the air to seem as if somebody is doing something wrong.”
But speaking on the floor of parliament on Wednesday October 26, Mr Afenyo Markin stated that: “The issue is that although we have ECOWAS trade liberalisation that allows free movement of goods and persons, if you go to Nigeria, Dangote is receiving incentives. It’s getting 30 per cent export grant, he brings his cement here and those here who are engaged in local manufacturing are not getting such incentives from our government, so, obviously there is an imbalance when it comes to competition.”
“If you look at those who are importing from China, they bring their finished products – the powder – which is treated as a raw material and it comes in for bargain. There and then, the taxes that they pay on the raw materials as compared to those who are bringing the raw materials in and doing the manufacturing itself, obviously there is that unleveled playing field.
If the government is really serious about protecting our local industries, there is the need for them to check some of these imbalances. I am not against competition. Competition allows us to get value for money, competition brings down prices but unfair competition has its own consequences – you kill local businesses – then obviously those who are being employed would have to be sent home.”
He added: “We know the problems with the local industries – high energy cost – so if somebody is paying huge cost of energy, if somebody is paying more taxes and somebody else is getting it at a cheaper cost, you do not expect there to be level playing field.”