A significant number of importers in Ghana are abandoning their operations over the increasing number of taxes charged at the country’s ports coupled with delays and bureaucracy.
The development Citi Business News understands has been going on for months and in some cases a number of years.
Importation of goods for wholesale and retail purposes is huge business in Ghana.
The high magnitude of imports has significant impact on the country’s exchange rate performance annually, especially during the first and fourth quarter, during which the cedi experiences massive depreciation against the dollar and other major currencies.
This is due to the high demand yet low supply of dollars by importers and traders.
Moves by Government over years to reduce importation has been unsuccessful.
But Citi Business News has learnt there is a growing number of importers who have ditched the business due to the challenges they face at the ports.
Recent figures from the central bank of Ghana reveal that the country’s imports have declined with exports increasing.
Trade Accounts
Total balance of trade recorded a surplus of 1.429 billion dollars as at June, 2017, equivalent to 3.1 percent of GDP. The surplus is an improvement over the 1.4 billion dollars deficit recorded in the same period last year.
The development has been attributed to the declining imports for the period under review. The figures which summarize Ghana’s economic activities between June 2016 and the same period 2017, stated that Ghana’s total exports increased by 2 billion dollars to 7.159 billion dollars as at June 2017.
This was an increase from the 5.139 billion dollars recorded in the same period last year. Ghana’s oil exports tripled within the one year period. The country exported 1.24 billion dollars worth of oil as at June 2017; up from the 408.3 million dollars worth of oil exports.
Gold and cocoa exports also followed with 1 billion and 224 million dollars worth of exports as at June this year, respectively.
Meanwhile imports recorded a general drop between the twelve months period ending last month.
Ghana’ imports reduced by 12.42%; from 6.54 billion dollars to 5.72 billion dollars during the one year period.
Oil imports dropped by 19 percent; from the 905.8 million dollars to 733.1 million dollars.
Also, non-oil imports declined by 11.35%; from 5.63 billion dollars to 4.99 billion dollars as at June 2017.
Reasons for ditching import business
Some importers who spoke to Citi Business News cited high taxes, delays, bureaucracy and duplication of roles as the main reasons why majority of importers are abandoning the trade.
There are a number of taxes charged at the ports currently one of them is the Common External Tariff which was enacted in 2016, it repealed the Harmonized System and Customs Tariff Schedule 2012, there is also import duties which range between 0 and 35 percent depending on the nature of item imported.
Others are VAT and NHIL of 17.5 percent and special import levy among others.
The National Executive member of the Ghana Union of Traders Association (GUTA), Benjamin Yeboah who confirmed the development to Citi Business News said he was also forced to abandon the business because of the challenges.
‘I started this business some time back. I stopped because doing business at the ports to me is like a punishment because the trauma, the high taxes, bureaucracy, delays, problems you face there is very hectic.
You are forced to do so many things just to get your goods cleared at the ports. In your quest to ensure your goods come out of the ports, one is even forced to push someone to do what he or she is actually mandated to do and that is the problem you see at the ports.
I have even stopped importing because I got fed up with the system. Now I buy from the importers after they are done clearing their goods’.
