THE Ministry of Trade and Industry (MoTI) has challenged the country’s industrial community to manufacture quality products that can withstand the threat posed by foreign products rather than waiting on the government to encourage protectionism in the local market.
The sector Minister, Ms Hannah Tetteh, who threw the challenge during the 22nd anniversary celebration of the Africa Industrialisation Day in Accra said the solution to the influx of foreign goods into the country “is not only through increased tariffs of protectionism from the government.
“The solution is a well-developed and strong industry capable of manufacturing quality products that can match up to the foreign ones if not undo them,” the minister said.
The Africa Industrialisation Day is a day set aside by the United Nations Industrial Organisation (UNIDO) aimed at promoting industrialisation in the continent through a shared responsibility with the various governments and industrial organisations.
The annual event, which celebrates industries in Africa, is often celebrated in the country by UNIDO in conjuction with the Association of Ghana Industries (AGI), the umbrella body of industries in the country. It was on the theme: ‘Tackling energy poverty in Africa’.
The launch, which coincided with the AGI’s industrialisation week, attracted representatives from the UNIDO, UNDP, the Energy Ministry, as well as the MoTI.
While admitting that foreign goods posed a threat to local industries and the economy at large, Madam Tetteh said the government would continue to play its part in checking the trend but called on local industries to step up the quality of their products as a way of undoing the foreign ones, most of which were often shoddy.
She also encouraged the AGI “to take industrialisation to the rural areas instead of limiting them in the cities and towns.”
Madam Tetteh mentioned the launch of the ministry’s industrial policy document earlier this year as some of the initiatives aimed at stimulating industrialisation in the country.
The Industrial Policy, she said, was aimed at increasing the accelerating growth in the country’s industry through a targeted growth rate of 12 per cent.
The President of the association, Nana Owusu Afari, who chaired the function later told the Daily Graphic that the association “is not asking the government to support local industries produce shoddy goods.
“Quality is not the problem,” he stated and added that the “AGI itself is even passionate about quality products but we also need government policies that will help local industries to produce to meet the local capacity”.
The president tasked the government and industry stakeholders “to be proactive in dealing with our age old challenges,” noting that the recently launched Industrial Policy Document by the Ministry of Trade and Industry could prove a “strategic document for revitalising industry in Ghana.”
Friday, November 25, 2011
Wednesday, November 23, 2011
Chamber worried over cost of mining
THE Ghana Chamber of Mines (GCM) has expressed worry over the rising cost of mining in the country as it impacts negatively on the individual margins of the mining companies.
The chamber hopes that laudable economic policies will be implemented by the government in the wake of the oil production “to properly integrate the gas into other resources for industries to use.”
The Chief Executive Officer (CEO) of the chamber, Dr Toni Aubynn, who expressed the chamber’s worries to the Daily Graphic in an interview, said “mining companies in Ghana incur one of the highest operational costs in the sub-region,” a development he said was discouraging investors from investing in the country’s mining sector.
Such costs, he said, ranged from mining companies’ use of utilities, fuel and the provision of social amenities for mining communities to the cost of hiring expatriate labour due to the lack of skilled natives for specific jobs in the sector and the import of equipment and materials for their operations.
“Most of the mining communities don’t have social amenities such as roads, hospitals, schools and so on which forces the mining companies to provide those amenities at their own costs,” the CEO said.
He also explained that the rising cost of materials in the global arena impacted negatively on the local mining industry “because we import most of the equipment and materials that are used in the work. In effect, we import some of the costs although we could have sourced them locally at a much lesser cost if there were local companies supplying them,” he said.
The CEO also lamented the unavailability of specific companies in the country that could produce for the sector to help reduce costs in the sector while earning revenues for themselves and the country at large.
Dr Aubynn has, however, admitted that the establishment of an alternative power generating plant for use by mining institutions has reduced the cost of electricity in the sector but said it could even slow further should the gas generated from the oil drilling be used properly.
Mining companies in the country pay a specially rated price for diesel, far above the government subsidised ex pump price of the product.
On the whole, Dr Aubynn said “the rising cost is not making things easy and that is impacting negatively on revenues generated from the sector.”
He also called on Ghanaians not to look at the mining sector as an industry that should contribute to economic development only through taxes “but should look at how the sector can be properly integrated into the national economy to accelerate development.”
The mining sector alone contributed about 23 per cent to total revenues generated last year and the amount could even rise as global prices of diamond and gold continue to rise.
The chamber hopes that laudable economic policies will be implemented by the government in the wake of the oil production “to properly integrate the gas into other resources for industries to use.”
The Chief Executive Officer (CEO) of the chamber, Dr Toni Aubynn, who expressed the chamber’s worries to the Daily Graphic in an interview, said “mining companies in Ghana incur one of the highest operational costs in the sub-region,” a development he said was discouraging investors from investing in the country’s mining sector.
 |
| Dr Toni Aubynn, CEO, GCM |
Such costs, he said, ranged from mining companies’ use of utilities, fuel and the provision of social amenities for mining communities to the cost of hiring expatriate labour due to the lack of skilled natives for specific jobs in the sector and the import of equipment and materials for their operations.
“Most of the mining communities don’t have social amenities such as roads, hospitals, schools and so on which forces the mining companies to provide those amenities at their own costs,” the CEO said.
He also explained that the rising cost of materials in the global arena impacted negatively on the local mining industry “because we import most of the equipment and materials that are used in the work. In effect, we import some of the costs although we could have sourced them locally at a much lesser cost if there were local companies supplying them,” he said.
The CEO also lamented the unavailability of specific companies in the country that could produce for the sector to help reduce costs in the sector while earning revenues for themselves and the country at large.
Dr Aubynn has, however, admitted that the establishment of an alternative power generating plant for use by mining institutions has reduced the cost of electricity in the sector but said it could even slow further should the gas generated from the oil drilling be used properly.
Mining companies in the country pay a specially rated price for diesel, far above the government subsidised ex pump price of the product.
On the whole, Dr Aubynn said “the rising cost is not making things easy and that is impacting negatively on revenues generated from the sector.”
He also called on Ghanaians not to look at the mining sector as an industry that should contribute to economic development only through taxes “but should look at how the sector can be properly integrated into the national economy to accelerate development.”
The mining sector alone contributed about 23 per cent to total revenues generated last year and the amount could even rise as global prices of diamond and gold continue to rise.
Plant Pool eyes STC, As SSNIT moves out of the debt-ridden company
THE InterCity STC Coaches Limited (STC) is up for graps by private investors who have the nerve to withstand the various challenges in the country’s transport business. But who is interested? Maxwell Adombila Akalaare peeps into the bidding room of the debt-ridden transport company.
PRIVATE investors interested in reviving and running a transport business in Ghana have started tickling the Transport Ministry as they battle it out for an opportunity to own a part of the InterCity STC Coaches Limited currently under a debt crisis.
Among the companies presently doing the underground bidding include other passenger transport companies, vehicle distribution companies and individual business gurus interested in taking over from SSNIT’s current majority shareholding in STC.
Vanef Consortium Limited (VCL), the company that won a Divertiture Implementation Committee (DIC) bid in 1998 to take over STC is, however, absent on the list.
The battle to own a part of STC followed government’s open intentions of returning SSNIT’s 80 per cent equity in the company to any private investor that may so desire, citing SSNIT’s unwilligness to invest in the transport company as bases.
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| Weak managenment has eroded STC's image |
The Trust has often said that its business portfolio of keeping watch over people’s pensions bars it from gambling in investments, a believe that could have caused it not to “invest a pesewa in STC” after it took over as majority shareholder in STC from Vanef Consortium around 2003.
The Trust’s take over of Vanef’s shares was expected to boost investment in the company, including the procurement of more buses. Such expectations are, however, yet to see reality, nearly a decade after the SSNIT take over. STC currently owns 70 buses, out of which only 30 are roadworthy, a development that is causing intermittent breakdowns of its buses to the frustrations of its age-long passengers.
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| Mr Collins Dauda, Transport Minster |
“SSNIT is currently revaluing its shares in the company so as to arrive at what price tag to place on the trust’s 80 per cent shares in the company for the process to begin,” Mr Dauda said.
On the necessity of the move, Mr Dauda said “the business of transport in Ghana is best and efficiently managed by private investors who have the money and expertise to commit into the company and get it runing.”
Mr Dauda will, however, not mention the investors that have currently expressed interest in partnering the government to revive STC except to say “a number of investors have come up willing to take up SSNIT’s shares.”
SO WHO ARE THESE INVESTORS?
Local distributors of Yutong branded buses in the country, J A Plant Pool is one of them.
Signals picked by the GRAPHIC BUSINESS on the underground biddings indicated that Plant Pool which has been assisting the now staggering STC with technical assistance and prsented it with 10 buses this year is now rooting for the company’s 80 per cent stake.
The Transport Minister will, however, not confirm nor deny the information as he insisted on not commenting further.
Although Mr Lolu Akindele, the General Manager of Plant Pool will also not outrightly confirm the company’s interest in acquiring STC’s shares, he insisted on leaving “such a decision for my board to take.
“We have been assisting STC with a lot of things including buses and services and I must say our relationship in the past has been good so far. Investing in the company is something we can consider but such is a decision for my board to take and not me,” Mr Akindele added.
And for those who doubt the expertise of Plant Pool, a vehicle distributing company, in owning and running a transport company like STC, Mr Akindele said “the thing is all about experience. It is basically about management; understanding the dynamics of the business - whether running or selling vehicles - and that is what we Plant Pool have.”
STC’s current debt position, is however, a headache to the Plant Pool GM and his company’s board even though the board is yet to officially announce its bid for STC.
He noted that STC’s infrastrcuctural set-ups such as terminals and workshops across the country were “assets that make the company viable but its debt issue will definately be a headache.”
STC currently operates in five West African countries in addition to its regional routes in Ghana. The company also has 19 local and three international stations offering parcel services and package delivers to all of its destinations in addition to the passenger service.
Metro Mass Transit (MMT) Limited, another transport company in the country that has just weaned itself off government subventions also has its eyes on SSNIT’s shares at STC.
MMT is, meanwhile considered a weaker bidder for STC’s 80 per cent shares mainly because of its shareholding structure. The Government of Ghana holds 45 per cent of the company’s shares with the remaining 55 per cent being in the hands of other institutions, most of which are partly owned by the government).
It is thus not clear if the government will want to ‘own’ STC again after incessantly annoucing its readiness to bring in priavte investors.
There are also speculations of an American-based individual investor with particular interest in construction bidding for the stake.
There is however, less information on the said investor although sources close to the deal insisted the guru is a force to reckon with.
The Managing Director of STC (currently on leave) confirmed to the GRAPHIC BUSINESS on phone that more foreign investors were also interested in investing in STC.
He could, however not mention names but said “some are indidviduals with financial backings and some are also companies wanting to invest in STC .”
THE ACCUMULATED LEAVE
But as the underground bidding for STC continues, a new directive at the company has just sent almost all its regional managers, including its MD going on compulsory leaves.
Sources within STC told the GRAPHIC BUSINESS that the MD’s going followed a directive from the company’s board to that effect.
The source added that the board has consequently commenced investigations into Mr Attivor’s tenure as MD, an investigation Mr Attivor said was baseless.
“Set up a committee to investigate what? I have not done anything wrong. They can go ahead to do what they want but I am not afraid of anything,” he told the GRAPHIC BUSINESS on phone.
But should the board not recall him after his two year accumulated leave comes to an end this November, Brigadier Attivor said “I will find out why.”
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| Ownership of STC is changing hands again |
Relax taxes on mining industry
FOR the government, enabling infrastructural development for economic growth means more revenue and this could also mean more taxes. For industry, however, taxing more means shrinking growth. Maxwell Adombila Akalaare reports
THE Ghana Chamber of Mines (GCM) has signaled to the government to consider relaxing the totalled 20 per cent taxes imposed on companies within the country’s mining sector or risk shrinking growth and job creation within that sector of the economy.
The chamber is of the view that the said taxes will tighten internal investments within the companies and the sector as a whole, suck deep into their margins and in effect limit them from expanding to spur growth and job creation in the coming years.
The government, through its 2012 Budget and Economic Policy Statement increased corporate taxes for mining companies by 10 per cent, introduced a windfall profit tax of 10 per cent but gave a 20 per cent rebate on all capital allowances spanning five years.
Such taxes, according to the Finance and Economic Planning Minister, Dr Kwabena Duffuor, who read the budget last Wednesday, were premised on the fact that “the economic and social benefits that the sector provides (to Ghana) do not meet our expectations.”
The imposition of the taxes on the mining sector which formed part of the government’s wider aim of mobilising revenues to support infrastructural development and job creation trailed an earlier recommendation by the IMF team that the government considered innovative ways of raising more revenues from the country’s mining sector.
The Chief Executive Officer of the chamber, Dr Toni Aubynn, however, told the GRAPHIC BUSINESS in an interview that the present resorting to increasing corporate taxes and imposing a windfall profit tax on the companies will rather discourage growth in the sector.
“Imposing a 10 corporate tax on the industry and another 10 per cent of windfall profit will very likely have a rather uncomfortable impact on the industry.
“The jump from 25 per cent of corporate taxes to 35 per cent is huge and you can imagine the impact on the companies, the industry and the economy in general,” Dr Aubynn said adding that the result could possibility be a shrink in companies’ investments, growth and consequently job creation.
“The 2012 Budget’s objective is to create employment by spurring growth and so you would think that the government will want to be careful not to kill the hen that lays the golden egg. But once you impose 20 per cent of taxes on the sector at a go, then you indirectly tire the hands of the companies from expanding to create the jobs you want,” he said.
He has meanwhile indicated that the chamber was “not against government maximising revenues from its extractive industry but you also don’t have to do it such that the companies suffer at your expenses.”
On the 10 per cent windfall profit tax, Dr Aubynn said “the chamber is not even sure of how it will be calculated; what is a windfall profit and who determines that,” he asked noting that although windfall profits are normally determined by global prices vi-a-vis the price targets set by the company on the product concerned, “rising mineral prices in the global mineral market mean rising cost for mining companies and that impacts negatively on the revenues generated.”
The GCM CEO said his outfit would have wished to be part of the discussions that led to the fixing of the taxes, particulary the windfall profit tax.
He was thus hopeful that the government, through the MoFEP, will reconsider its decision on the taxes by meeting the chamber in the coming days “to atleast clarify issues on the taxes especially the calculations of the 10 per cent windfall profit tax.”
Dr Aubynn also wondered why Dr Duffuor intimated during the presentation of the budget to Parliament that there was lack of transparency in the country’s mining sector after the chamber was instrumental in getting Ghana to sign onto the Extractive Industries Transparency Initiative (EITI), a programme aimed at opening up extractive industries to public scrutiny.
“And if the government even has an issue with any company regarding transparency, cann’t they order such a company toopen up its books for checks by the government? So why this issue of lack of transparency,” he asked.
On the whole, Dr Aubynn said the country needed to change its mindset towards mining “as a sector that does not contribute to economic development.”
According to him, although Ghana has mined minerals for a long time, the country was yet “to understand how to use mining to develop the economy.
“It is not mining companies that will develop our economy for us,” he said noting that Ghana has over the years “thought that mining companies in the country should contribute to economic development through higher taxes. But that should not be the case.”GB
THE Ghana Chamber of Mines (GCM) has signaled to the government to consider relaxing the totalled 20 per cent taxes imposed on companies within the country’s mining sector or risk shrinking growth and job creation within that sector of the economy.
The chamber is of the view that the said taxes will tighten internal investments within the companies and the sector as a whole, suck deep into their margins and in effect limit them from expanding to spur growth and job creation in the coming years.
The government, through its 2012 Budget and Economic Policy Statement increased corporate taxes for mining companies by 10 per cent, introduced a windfall profit tax of 10 per cent but gave a 20 per cent rebate on all capital allowances spanning five years.
Such taxes, according to the Finance and Economic Planning Minister, Dr Kwabena Duffuor, who read the budget last Wednesday, were premised on the fact that “the economic and social benefits that the sector provides (to Ghana) do not meet our expectations.”
The imposition of the taxes on the mining sector which formed part of the government’s wider aim of mobilising revenues to support infrastructural development and job creation trailed an earlier recommendation by the IMF team that the government considered innovative ways of raising more revenues from the country’s mining sector.
|
| Dr Toni Aubynn, CEO, GCM |
The Chief Executive Officer of the chamber, Dr Toni Aubynn, however, told the GRAPHIC BUSINESS in an interview that the present resorting to increasing corporate taxes and imposing a windfall profit tax on the companies will rather discourage growth in the sector.
“Imposing a 10 corporate tax on the industry and another 10 per cent of windfall profit will very likely have a rather uncomfortable impact on the industry.
“The jump from 25 per cent of corporate taxes to 35 per cent is huge and you can imagine the impact on the companies, the industry and the economy in general,” Dr Aubynn said adding that the result could possibility be a shrink in companies’ investments, growth and consequently job creation.
“The 2012 Budget’s objective is to create employment by spurring growth and so you would think that the government will want to be careful not to kill the hen that lays the golden egg. But once you impose 20 per cent of taxes on the sector at a go, then you indirectly tire the hands of the companies from expanding to create the jobs you want,” he said.
He has meanwhile indicated that the chamber was “not against government maximising revenues from its extractive industry but you also don’t have to do it such that the companies suffer at your expenses.”
On the 10 per cent windfall profit tax, Dr Aubynn said “the chamber is not even sure of how it will be calculated; what is a windfall profit and who determines that,” he asked noting that although windfall profits are normally determined by global prices vi-a-vis the price targets set by the company on the product concerned, “rising mineral prices in the global mineral market mean rising cost for mining companies and that impacts negatively on the revenues generated.”
The GCM CEO said his outfit would have wished to be part of the discussions that led to the fixing of the taxes, particulary the windfall profit tax.
He was thus hopeful that the government, through the MoFEP, will reconsider its decision on the taxes by meeting the chamber in the coming days “to atleast clarify issues on the taxes especially the calculations of the 10 per cent windfall profit tax.”
Dr Aubynn also wondered why Dr Duffuor intimated during the presentation of the budget to Parliament that there was lack of transparency in the country’s mining sector after the chamber was instrumental in getting Ghana to sign onto the Extractive Industries Transparency Initiative (EITI), a programme aimed at opening up extractive industries to public scrutiny.
“And if the government even has an issue with any company regarding transparency, cann’t they order such a company toopen up its books for checks by the government? So why this issue of lack of transparency,” he asked.
On the whole, Dr Aubynn said the country needed to change its mindset towards mining “as a sector that does not contribute to economic development.”
According to him, although Ghana has mined minerals for a long time, the country was yet “to understand how to use mining to develop the economy.
“It is not mining companies that will develop our economy for us,” he said noting that Ghana has over the years “thought that mining companies in the country should contribute to economic development through higher taxes. But that should not be the case.”GB
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