The Ghana Union Traders Association (GUTA) has proposed a new scheme to the government to support the production and sale of made-in-Ghana goods.
Titled the “tripod scheme”, the president of GUTA, Joseph Obeng, said it would involve the government earmarking funds to industries so that they could provide supplier’s credit to distributors to support the made-in-Ghana agenda.
This will allow distributors to buy made-in-Ghana goods without having to pay upfront, which would make it easier for them to sell these goods to consumers.
GUTA
Members of GUTA, the President said, had often had challenges securing suppliers’ credit locally, thus necessitating a look beyond the shores of Ghana, where they can access around 90 to 180 days of suppliers’ credit from foreign manufacturers to cover the importation of goods produced elsewhere into Ghana.
The tripod scheme, which he suggested is similar to the EXIM Bank arrangements that exist in other countries, allows for government-guaranteed loans that are made available to businesses that export locally produced goods to other destinations.
“This helps to make it easier for businesses to get the financing they need to export their goods, and it also helps to promote the sale of domestically produced goods,” Mr Obeng said.
Mr. Obeng made the call when he led the leadership and some members of the various groupings under GUTA on a tour to Avnash Industries, producers of the Golden Drop and Lafia vegetable oils, as well as Royal Farmers’ rice in Tema.
The visit was part of GUTA’s local industry outreach initiative aimed at accessing the level of production and how the association could source goods from local manufacturers.
The group was taken around the company’s edible oil refinery, which produces 500 metric tonnes per day.
The company also runs a 500 metric tonnes per day rice milling factory in Tamale, the largest rice milling plant in the sub-region, which provides a ready market for 290,000 local rice farmers in that area.
Just like any other local manufacturing company, officials of Avnash say the company has faced its fair share of challenges, including high production costs, the importation of cheaper edible oils that have priced their products out of the market, and trade policies from neighbouring countries that have hindered the exports of their products to markets within the sub-region.
Pragmatic Policies
Mr. Obeng said that the idea of promoting made-in-Ghana goods should not be done by paying lip service, but by putting in place “pragmatic policies” that would help to boost the production and sale of made-in-Ghana goods.
He maintained that the “tripod scheme” would also be a more effective way to use the start-up capital that the government may be providing young people to boost local manufacturing competitiveness.
“The start-up capital that government is talking about should not be given to people who do not know how to even start up, rather, it should be given to identifiable businesses that can source locally produced goods,” Obeng said.
He remains hopeful that the government will create a win-win situation for both businesses and consumers to help boost the Ghanaian economy.
The Group Head in charge of Industries at Avnash, Vipul Jain, in his remarks, indicated that the company, which previously exported 3,000 to 4,000 metric tons of edible oil to Senegal, is unable to do so presently, owing to the imposition of a $200 per metric tonne tax by officials of that country.