Most industries in Ghana are facing imminent collapse, mainly due to the high operational costs resulting from the cumulative taxes increases, fuel, and utility hikes.
The Public Utilities and Regulatory Authority (PURC) increased tariffs by 150 percent last month, and this is already threatening to cause the collapse of industries in the country. But the incessant increases in residual fuel oil seem to be the last straw to break the camel's back.
Industries say although petroleum prices have been reduced twice in the last few months, due to decreases in crude prices on the international market, RFO, which is the mainstay of industry, has been increased twice, by 6% and 5.3% on October 1st and 16th, 2013, respectively.
"What is the basis for the increases, when the price is rather supposed to decrease in consonance with the other reduced products? Is government not interested in assisting industry to grow?" an industry player posed the question.
"If the intention is to compel us to close down, then we must be told in plain words to do so, rather than this stealthy way of forcing us to close down. Already, we are burdened with a plethora of problems and are at a near collapse, so we only need to be pushed a little to complete the process," noted a frustrated manufacturer.
Already, many local manufacturing industries are facing unfair competition from cheap imported products, which is threatening to kick them out of business.
The local textile industry, in particular, has raised many concerns about the continuous inflow of cheap, smuggled and pirated prints of local designs from China, which flood the Ghanaian market.
"The bane of the industry is the high cost of our unfinished products, compared to the imported ones. This is primarily due to the multiplicity of taxes, which are evaded by the smugglers... ," noted Moses Tetteh Zizer, General Manager Administration, Printex Limited, in a letter to the Association of Ghana Industries.
He emphasised that if nothing was done in addressing the issues of hikes in tariffs and taxes, "it will result in most industries folding up."
Aquafresh Limited, a Ghanaian company involved in the business of manufacture & marketing of packaged food products and non-alcoholic beverages in Ghana, has also warned that the increases "will lead to the demise of an already comatose industry."
The company, in a letter to the President of the AGI for assistance in resolving issues affecting industries, enumerated the two percent import levy and ten percent environmental tax on plastics, together with fuel price increases, as those which will eventually bring the company to its knees, if the government does not intervene.
"While importers of similar finished products, in addition to under-declaring their values and, thereby denying government of the much-needed revenue, are exempted from the payment of the Environmental Tax, we, the local manufactures, are supposed to pay ten percent (10%) on the plastics we import for production."
"The forgoing gives us the impression, and rightly so, that government has no intention to support the local industries to re-develop their capacity and assist in growing the economy... "