Multinational company shuts down oil plant in Ghana over benchmark, other issues

Wilmar Africa Limited has shut down its oil plant in Ghana following operational difficulties the company is facing in the Ghanaian economy.

The manufacturer of fast-moving consumer goods in Africa, said in a statement that it was hoping that the Government of Ghana through the Ghana Revenue Authority (GRA) would reverse the benchmark policy to assist large manufacturing companies.

However, the government has suspended the reversal.

Following opposition from some trade unions including the Ghana Union of Traders Association (GUTA), the Ghana Revenue Authority (GRA) suspended the reversal of the policy.

A statement issued by the GRA on Thursday January 13 said “Following the outcome of a meeting held on Wednesday 12th January 2022 the customs Division of GRA has been directed to suspend the implementation.

“Government’s policy directive on removal of reduction of values of imports on selected items until further notice to enable more engagements with all the relevant stakeholders.”

This also came after President Nana Addo Dankwa Akufo-Addo ordered the suspension of policy to allow for further consultations.

The president’s order came after the Finance Ministry had agreed to further engagement on the discounted benchmark reversal after crucial meeting with other stakeholders.

The meeting on Thursday January 6 was attended by the Finance Minister Ken Ofori Atta, trade union leaders, Customs and the Ghana Revenue Authority (GRA) to conclude on what was termed” satisfactory values for importation”.

The reversal was to affect 143 items under three categories prescribed by the Ghana Revenue Authority.

The benchmark value, which is the amount taxable on imports, was reduced by 50 percent for some goods. The government had hoped that this was going scale up he volume of transactions of make Ghana’s ports competitive.

The government decided to reverse this decision after it met opposition from Association of Ghana Industries and the Ghana Union of Traders Association (GUTA).

But it met opposition from trade unions including the Ghana Union of Traders Association (GUTA) and Importers and Exporters Association of Ghana (IEAG).

The Executive Secretary of the IEAG, Sampson Asaki Awingobit, served notice to sue the government over the reversal.

A statement issued by Wilmar said on Friday January 14 “This has made it very difficult for us to sell in the local market because imported oils from Asia are selling far cheaper than our product The unit cost of our oil is high as compared to the imported ones as we have to contend with all the overheads in our cost build-up. The government’s announcement of the reversal of the duty discount on benchmark policy was welcoming news; however. Government has suspended action on this announcement,” the statement noted.

“To make matters worse, our export market, which has been complementing our local sales, has also been hit by non-availability of vessels to transport the product to our main export market – Senegal due to the Covid situation. These compounded problems resulted in our worse sales in December 2021 and the low sales continuing into January 2022,” the statement added.