Ghana can build on its good performance under the African Growth and Opportunity Act (AGOA) programme by focusing more on value addition to its export commodities like cocoa and Shea Butter and exporting to the US market.
Available data from the US Economic Policy in Africa show
that between 2016 and 2017 Ghana saw its exports to the United States
more than doubled, with exports under AGOA quadrupling to more than
Mr. Harry Sullivan, Acting Director for Economic and Regional Affairs
at the Bureau of African Affairs, told selected African journalists
during a telephone-briefing organised by the Africa Regional Media Hub,
that African non-oil exports to the US under AGOA had grown from
US$1.3billion in 2001, the year that the legislation was passed, to
US$4.2billion in 2016, with the trend continuing to be positive since
Currently, there are thousands of products available under the AGOA list to enter the United States duty-free.
For more than a dozen years, AGOA has been the U.S. government’s
signature trade initiative with sub-Saharan Africa – helping diversify
exports, create jobs, reduce barriers to trade, and expand economic
opportunities for the region’s population.
With more than 6,000 products receiving duty-free treatment when
exported to the United States, AGOA has helped generate jobs through
trade and investment opportunities during its short lifespan.
AGOA provides a framework for improved access to U.S. credit and
technical expertise, and establishes a high-level dialogue on trade and
investment in the form of an annual US/sub-Saharan Africa Trade and
It is an integral component of the United States’ overall trade with
sub-Saharan Africa, increasing two-way trade between the two regions to
over US$95billion in 2011.
AGOA also generated a US$13billion increase in two-way trade between 2010 and 2011, and a total of US$716.1 billion since 2001.
Mr. Sullivan said agricultural exports, especially, like cocoa and shea butter, can help Ghana up its earnings through AGOA.
“Everybody knows you provide a huge portion of cocoa to the world;
so, if you could do some first-class processing in Ghana, that would add
value to your economy. Shea butter, I believe, is also present in
northern Ghana,” he said, and urged Ghana to look at those kinds of
agricultural products as well as light industry.
He explained that Ghana is a success story in Africa and can build on
those attributes by moving from a market entrepreneurship to
larger-scale industries. “And that can happen, perhaps, through
cooperatives,” he stated.
He indicated that although the American market has huge benefits,
there is a need to produce at the necessary quality and quantity; and
cooperatives could sometimes provide a mechanism for pooling resources
in order to reach the required quantities.
Statistics on US-Africa Trade through 2017 showed that total U.S.
trade with sub-Saharan Africa rose by 16.8%: from US$33billion in 2016
to US$38.5billion in 2017.
U.S. exports to Africa also increased, by four per cent to 13.1
billion, while African exports to the United States rose by more than 24
per cent to more than 24 billion.
“Increased oil exports did account for a large share of this
increase, but we also saw some encouraging signs of diversification.
African exports of agricultural products to the United States rose by
10% to US$2.7billion in 2017.
“We often say that the cornerstone of our trade policy with Africa is
the African Growth and Opportunity Act. And that’s been true since
2000, when the first AGOA legislation passed; and AGOA’s special benefit
is offering duty-free market access for thousands of products that are
eligible to African countries.
“AGOA provides a powerful incentive to increase trade and investment,
which has spurred inclusive economic growth and regional stability by
providing that market access,” he stated.
Friday, March 9, 2018
.They submit no quarterly financials
- They lie about status of expat employees
- And they flout the law, sellING above 30% of products locally
“So far, less than 20 companies have submitted their financial statements; and these are the same companies that continue to comply with the rules,” he told CEOs of licenced free zones enterprises from the Eastern, Greater Accra and Volta Regions at a one-day forum in Accra.
“Most of the companies are not submitting their books because they have expatriate working staff with visitor’s permits in the country,” he said.
“Some of them also come with falsity and misrepresentation of information that affects the GFZA’s reporting to government,” he said.
More grievously, he said, some of the quarterly reports are presented with false information, as most companies do not comply with the basic requirement on free zones companies to sell only 30 percent of products locally and export the remaining 70 percent.
“We have had complaints of free zone enterprises selling more than the stipulated 30% on the local market,” he said.
He disclosed that most of the companies owe ground rent, and some have not renewed their licences – which has greatly affected finances of the GFZA.
The Ghana Free Zones Programme is designed to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encourage the development of commercial and service activities at sea and airport areas.
It works to create a conducive atmosphere for foreign investments and currently has capital investment worth over US$3.4 billion, with over 200 companies.
The free zones enclave has been exporting an annual average of US$1.5 billion worth of products since its establishment in 1995, or some US$30.9 billion over the past two decades.
Its focus, currently, is to do some US$5.4 billion of exports in 2018, by licensing more free zones companies.
Establishment of New Units
The authority intends to set up and Oil and Gas Unit, to assist investors in that sector, whilst a Research and Business Development Unit has also been created to undertake market intelligence and source new markets for companies that wish to venture into new markets and not rely on one traditional market.
Security at the Tema Export Processing Zone (EPZ), he said, will be increased. The GFZA, in this regard, is having discussions with the Ghana Armed Forces to provide a military detachment at the Tema EPZ.
Michael Okyere Baafi told CEOs of the free zones companies that the IT unit at the authority has been made more robust and expanded into a Management Information Systems (MIS) Department.
He said his outfit is working on creating the needed platforms to implement a paperless system and ensure that most documents, including quarterly returns, can be submitted online.
“With the introduction of speed as a business strategy, you – our clients – will be a better judge of that. I hope you have experienced an improvement in the time for processing your documents.”
He indicated that a business centre is coming up at the Tema enclave as a Free Zones enterprise. This is to take care of the business needs of FZEs and other multi-national companies around.
This, he said, will serve as a community centre for the enclave – with amenities like meeting and conference halls, event centres, a health-care centre and shopping mall.
Minister for Energy, Boakye Agyarko, is hopeful that within the next 18months, 50 megawatts of solar power will be added to the national grid to augment country’s energy delivery.
Speaking to B&FT after the signing of Memorandum of Understanding on renewable energy between the government and ENI Ghana, Mr. Agyarko said: “We are looking at an 18months development and delivery time lines but it will all depend on a number of factors within their control; but, our expectation is that if all go on well within 18months we should be able to start loading power from the solar systems through the same switchyard as Bui Power Authority’s Hydro onto the national grid.”
The Bui Power Authority, he said, has completed its switch yard to evacuate the full additional 250 megawatt to come online.
“What has not happened yet is ENI and Bui Power Authority sitting down and looking at the engineering of the solar portion and the development of the farm; that is something we have to leave to both sides to work out diligently. But within 18 months these engineering solutions and delivery are possible.”
Mr. Agyarko explained that government is playing a facilitating role with the construction of the solar system, since the project is entirely an ENI project.
“It is an ENI project; government is only facilitating the construction of the solar system where it will deliver power, it is just like any other independent power producer; it is not a cost to government,” he stressed.
Government has a target to have renewable energy constituting 10 percent of the country’s generation mix by 2020. There is also a plan to have government institutions supplementing their energy source with solar power.
Presently, less than 1% of electricity consumed locally is from renewable energy sources, a situation some players in the industry find worrying.
Parliament has already ratified a framework Agreement on the Establishment of the International Solar Alliance (ISA).
This means Ghana has already joined some 121 countries to access US$2 billion from the Indian government towards making renewable energy a reliable alternative to the more expensive sources of energy on the continent.
With this ratification, government hopes to expedite the integration of renewable energy in the sources for electricity among its institutions and agencies, including Junior and Senior High Schools.
Over the next five years, there would be significant increase of PV energy in the power mix for the country.
Signing the agreement, Luca Consentino, Executive Vice President ENI, Milan-Italy, assured government of the firm’s commitment to deliver world class solar power to help augment the country’s energy.
ENI, an Italian international petroleum company, has been in Ghana since 2009. The government is in a US$7bn contract with the company to produce oil and gas at Cape Three Points.
Even though the company is involved in the exploration of oil and gas, Mr Consentino indicated that his outfit is interested in renewable energy because “we believe that renewable energy is the future.”
For that reason, he said, it was collaborating with the government to realise its long-term strategy of integrating traditional businesses with renewable energy sources.
The Ghana Revenue Authority (GRA) has warned strongly that it will intensify its prosecutorial powers on businesses and persons who default in the payment of taxes after the expiration of a tax amnesty period this year.
The tax amnesty period expires after September 30, 2018, and the GRA is expected to rake in not less than GH¢500million from the exercise. The authority has been charged by government to collect GH¢39billion as revenue for the 2018 operational year.
Speaking at an interaction with the media in Accra, to provide insight into the Tax Amnesty Act and solicit support to educate the public on the Act, Commissioner General of the GRA, Emmanuel Kofi Nti, said: “GRA has the capacity to identify all potential taxpayers.”
He said: “I wish to say that being outside the radar is not an option because GRA will vigorously pursue all tax defaulters, including prosecuting them after expiration of the amnesty period of September 30, 2018. GRA will apply all the sanctions under the law. We are going to intensify our prosecutorial powers. There is going to be prosecution on tax issues this year”.
Parliament, during its final meeting last year, passed the Tax Amnesty bill as part of plans to improve voluntary tax compliance.
The law is expected to grant amnesty by readjusting the penalty to be paid by persons who fail to register with the Commissioner-General or file tax returns, or pay their taxes as required by law.
To take advantage of the amnesty, which will expire after September 2018, a defaulting individual or company that was not previously registered with the GRA must first register and submit all tax returns for the years in which their taxes have been in default.
GRA’s drive to boost tax-revenue collection comes at a time government has outlined new measures to avert a fiscal explosion as expenditure continues to spiral ahead of revenues, threatening the attainment of key budgetary targets.
Mr. Nti said: “Taxpayers who are found to be non-compliant and have failed to take advantage of this opportunity should expect to suffer sanctions to the fullest extent under the law”.
He added: “As tax administrators, it goes without saying that taxpayers are our partners in national development. I am therefore calling on taxpayers to partner the GRA, so that together we can contribute to building this dear nation.
“I wish to say that as a compliance measure this is the last time GRA, and for that matter government, is offering a tax amnesty for defaulting businesses and persons.
“I call on all persons earning income who have defaulted in the submission of their tax returns and payments or who have not previously registered with GRA to take advantage of the amnesty, come clean and regularise their tax affairs.”
Mr. Nti explained that tax amnesty is aimed at facilitating regularisation of tax affairs for persons who have defaulted in meeting their tax obligations, updating the GRA data base, improving the tax compliance culture, and broadening the tax net.
He indicated that the tax amnesty is specifically designed to afford taxpayers already registered with the GRA an opportunity to voluntarily submit their outstanding tax returns and pay the relevant taxes on all previously undeclared taxes – without being made to pay the penalties and interest that otherwise will have been imposed for such default under provisions of the Revenue Administration Act, 2016 (Act 915) and other tax laws administered by GRA.
“I am appealing for all income-earners and businesses to consider whether they need to come forward under the amnesty; for tax consultants to encourage their clients to take it up, if appropriate; and to our friends in the media to raise awareness of the opportunity,” he said.
“No matter the efforts put in by the GRA, we cannot be successful without our taxpayers who willingly and voluntarily honour their tax obligations: That is why an amnesty is being offered this year.
“We want to increase the pool of willingly compliant taxpayers, and in doing so increase – this year and for the future – the revenue that will allow us to fulfil the development aspirations that we all have for Ghana,” he remarked.