Seth Twum Akwaboah, the chief executive officer of the Association of Ghana Industry, has demanded that the Benchmark Value Discount Policy be reviewed.
He contends that the Benchmark Value's adoption hurt the expansion and development of the regional manufacturing sector, which in turn caused the local economy to collapse.
In an effort to improve port revenues for the government and make Ghanaian ports more competitive, the government established the Benchmark Value Discount Policy in April 2019.
With the exception of cars, the programme offered a discount of 50% on the delivery or benchmark prices of imports. Seth Akwaboah said on JoyNews' PM Express that while the Benchmark Value has significantly increased imports It has significantly hurt the regional industrial sector.
He pointed out that the Benchmark Value Discount Policy has to be thoroughly evaluated in order to provide a level market for both imported and domestically produced goods if the manufacturing sector is to completely revive.
"Capacity doesn't alter overnight since it takes into account both fixed and variable costs," he claimed. Fixed costs cannot be changed in the near term, whereas variable costs can be altered in the short term.
In order for the capacity to expand, you must thus provide the necessary conditions and market opportunities. Capacity doesn't expand in a vacuum; it rises to fill, thus if you want to wait for it to do so, you should fill a need in the market.
So firms can't really step up to the task and grow capacity if there's no potential for the market to develop. In any case, I think the existing capacity is sufficient to make a lot of the items.
Obviously, we are not self-sufficient in every product, but for many of them, if you create the possibility, as we did in the case of the benchmark value drop, you may genuinely induce contraction in the industrial sector.
"And the GRA said it that during the roughly two years that we had it, they lost 9 billion cedis in tax income, which is why the money they were receiving was not enough to cover their costs." "Benchmark value reduction, the review is very important because when you do it what you do is that when you create fairness in the marketplace then you're encouraging the productive sector to put in more investment, to put in more resources and then they can create the opportunity to fill the market," he continued.
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