Thousands of workers employed by the Sea-Freight Pineapple Exporters of Ghana (SPEG) are set to lose their jobs due to delays on the part of government in signing the Economic Partnership Agreement (EPA) with the European Union (EU) by October 1.
The Government of Ghana is expected to sign the EPA with the EU, failure which will attract a 19.4 percent tariff increase on pineapple exported to Europe.
[contextly_sidebar id=”eya9t2eOSpg9cJi9okiy6AbdJpjtOMYh”]SPEG, which exports about 35,000 metric tons of pineapple annually, raking in over 20 million dollars in foreign exchange earnings is worried about the devastating effect the job losses would have on the workers and economy at large.
Speaking on the Citi Breakfast Show, the General Manager of the association, Mr. Stephen Mintah disclosed that over 20,000 Ghanaians working in 21 pineapple exporting companies would be rendered jobless if government refuses to sign the EPA.
“Even now because of agitation from shareholders the investments have not been coming in as we have planned. In some areas, the productions have come down and some companies are thinking of laying off workers after October”, he said.
“If by October 2016, this EPA is not signed by Ghana alongside other African countries what it means is that there is going to be an application, at least for pineapple, I know not less than 3 percent of tariff, and even without tariff the competition is very keen and post tariff will be really difficult for us to survive”, he lamented.
He explained that any form of increase around this time will have adverse effect on investment as investors are keenly watching the next move of government.
“If you look at the international market trends and the margins that go with them, even one percent increase is significant because the cost structure is such that any half percent increase becomes significant”, he added, appealing to government to sign the contract since the sub-regions competitor, which is Costa Rica has signed the agreement.
Mr. Mintah debunked assertions that the group has not aggressively articulated its point to government, hence the delay in signing the agreement.
He recalled that the association has engaged government and other stakeholders on the benefits of the EPA despite some opposition from some minority group.
More export groups join to press govt
On his part, the Executive Secretary of the Ghana Root Crops and Tubers Exporters Association, Mr. Kwabena Taylor who was also on the show revealed that Ghana has the best variety of yam with high demand but the country risks losing this competitive mark if the tariff is imposed.
“In the sub region we are not the only people producing yams, Nigeria is producing yam, Ivory Coast is also producing yam , Togo is producing yam, Ghana has dominated the market so far, but if we make our yams expensive we will lose and subjected to quotas if we don’t sign the EPA”, He explained.
According to him, Nigeria is already trying to produce Ghana’s distinct “Pona” to take the market away from Ghana.
He maintained that the only way government can protect the industry is to sign the EPA to allow Ghanaians export yam to Europe using competitive price.
He stated that the association which has about 120 members may lose huge investments in the tariff increment is imposed.
On notifying government on the impact on employment, Mr. Taylor stated that the exchange earnings over the years should give policy makers a clear indication of contributions made by the sector.
Background of EPA
Ghana in December 2007 initialed an interim EPA to avoid a similar tariff action after the preferential trade agreement enjoyed under a previous treaty , named the Cotonou Accord expired in the year 2000.
Since 2000, African, Caribbean and Pacific countries (ACP) had been working with the EU Commission to sign a non-preferential bilateral trade treaty in which either side would offer both tariffs and concession, but in a regime that favours the ACP countries more.
ECOWAS member states including Ghana have been working since 2000 to sign the pact as a sub-region with the EU.
Trade volume between EU and Ghana
Trade volume between the EU and Ghana as at 2013 was estimated at 11.2 billion euros from 1.9 billion euros in 2000.
Currently, the EU is Ghana’s biggest trading partner as trade volumes is further estimated to surge.
Trade analysts and financial experts have expressed worry over government’s lack of clear direction on the matter as income from EU is crucial for Ghana’s investment and economic expansion.
In all, Ghana’s delay in signing a substantive Economic Partnership Agreement (EPA) with the European Union means a 20.5 percent tariff increment looms.
Government has until October 1 this year, to sign unto the agreement even though its intentions are unclear, sending mixed signals to exporters who fear higher taxes would be slapped on their produce making it less competitive.
Some of the producers and exporters who have expressed worry include; agro processing companies such as Golden Exotics, HPW Fresh and Dry, Blue Skies, Barry Callebaut and other cocoa processing companies producing for the EU market.
Also, canned tuna exporters such as Pioneer Food Carney would be affected. Ghana was unable to qualify as it was elevated to join a league of lower middle income countries.
Listen to full interview below
By: Lawrence Segbefia /citibusinessnews.com/Ghana