Ghanaian local manufacturers importing raw materials are set to benefit from the continuation of both Value Added Tax (VAT) deferment and the inbound manufacturing facility. This decision follows extensive discussions between the Ghana Revenue Authority (GRA) and the Association of Ghana Industries (AGI), which aimed to address the challenges manufacturers face when importing necessary materials for production. Seth Twum-Akwaboah, the CEO of AGI, emphasized the importance of this negotiation after the GRA proposed canceling one of the tax reliefs in April of this year. The AGI’s intervention was critical to ensuring that manufacturers could continue accessing these vital tax benefits, which significantly influence their financial operations and working capital.
During an annual general meeting and job fair in Kumasi, Mr. Twum-Akwaboah highlighted the logistical issues local manufacturers encounter. He explained that the lengthy process involved in importing raw materials means that manufacturers often face a delay of up to three months before they can fully process these materials and recover costs from sales. He argued that requiring manufacturers to pay VAT upfront before recovering costs from consumers would be detrimental, as it would effectively tie up their working capital and hinder their operational efficiency. This situation emphasized the need for supportive measures, such as VAT deferment, to create a more favorable business environment.
The event, themed “Empowering Growth: Building a Strong Workforce for Tomorrow,” served as a platform for AGI to discuss its advocacy initiatives aimed at fostering a business-friendly climate in Ghana. Over the past ten months, the AGI has engaged in various policy advocacy efforts to enhance the operational landscape for its members. These initiatives include partnerships with entities such as the Ghana Enterprise Agency (GEA) and the Mastercard Foundation, which are geared toward empowering approximately 4,800 enterprises through training and financial programs. Such collaborations are essential for equipping manufacturers with the necessary tools and knowledge to adapt to market demands and improve productivity.
In addition to these advocacy efforts, Mr. Twum-Akwaboah underscored the AGI’s commitment to facilitating access to financing for its members. The association has actively worked with various financial institutions to provide local manufacturers with better access to medium- and long-term loans. By ensuring that manufacturers can secure the necessary funding for their operations, AGI aims to bolster local production capabilities and competitiveness in both local and international markets. This supportive financial landscape is crucial for promoting sustainable economic growth and job creation in the manufacturing sector.
The job fair component of the event played a vital role in connecting local businesses with potential employees. It showcased products from AGI members, providing a platform for job seekers to interact directly with manufacturers. This interaction allowed for coaching and guidance, which is essential for workforce development. By encouraging direct engagement between employers and job seekers, AGI aims to address employment challenges and foster a sense of community among members. Creating a robust workforce is a crucial component of empowering growth within the local manufacturing sector and ensuring its long-term sustainability.
Overall, the collaborative efforts between the GRA and AGI represent a positive step toward supporting local manufacturers in Ghana. By maintaining critical tax reliefs, promoting access to financing, and facilitating workforce development through initiatives like job fairs, these organizations are working to create a more conducive environment for manufacturing growth. In doing so, they not only empower existing businesses but also pave the way for new enterprises to emerge, ensuring that Ghana’s manufacturing sector can thrive in a competitive global market.
