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Unfair competition killing local industries - Arun Thampi

A local exercise book producer, Vista 2000 Limited, has called on the government to implement policies that will deal with unfair competition in the manufacturing sector.

According to the company, the persistence of unbridled competition, especially from foreigners in the retail market and some key manufacturers, was gradually affecting the capacity of local industries.

The Managing Director of Vista 2000, Mr Arun K. Thampi, made the call in an interview with the Daily Graphic in Accra.

“We cannot keep quiet for too long; we’re likely to downsize very soon to maintain the company because management can no longer stand the unfair competition from these importers,” he said.

Local industries drowning

Mr Thampi said the situation was almost drowning the company; some local manufacturers had virtually closed down as a result.

Local manufacturers, he explained, paid huge amounts of statutory taxes, as against the importers who undercut the system through false declaration on the manifests.

“What the importers usually do is they under-declare to dodge taxes or pay less taxes, then sell at low prices to consumers, and that affects local manufacturers of educational materials,” Mr Thampi stated.

The Vista 2000 MD said taxes imposed on their category of imported items included basic duty of 20 per cent; 17.5 per cent Value Added Tax (VAT), other port charges amounting to about nine per cent, which together brought the tariff build-up to about 50 per cent.

“If local importers can be made to pay the same taxes that we pay, then we don’t have any issue; we can face them in competition because we produce the best for Ghanaians.”

“But that is not the case, and that is what we want the government to quickly address. We believe competition must be fair and healthy,” he stated.

Impact on sales

Mr Thampi stated that between 2014 and 2016, sales by Vista 2000 reduced by 25 per cent, describing the situation as “worrying and troubling”.

“Last year, the value of Note One and Note Three imported exercise books declared to customs were much less than what prevailed on the international market. All these activities go a long way to affect the local manufacturers,” he said.

Empowering local industries

The managing director said in addition to setting up manufacturing concerns the government ought to empower local industries also to boost the national economy.

He said if local industries were not protected against such unfair trade practices, the one district one factory vision might not be sustained, because the already existing industries might be dying out as a result of unfair competition.

Lasting solution

The Association of Ghana Industries (AGI) shares the concerns of Vista 2000 and other local industries.

Its Chief Executive Officer (CEO), Mr Seth Twum-Akwaboah, said imports were gradually killing local industries, hence the need for the government to provide a lasting solution.

He said local industries had the requisite capacity to produce majority of the things the nation needed, but the challenge was unfair competition in the sector.

“As an association, we believe that if the nation continues to over-liberalise the economy, the local industries will continue to suffer in the long run,” he said.