Although the 2021 Budget State and Economic Policy is expected to touch on various sectors of the economy, the Trade and Industry sector will be of high interest to Ghanaians, given its relationship with the creation of jobs and the economy.
The budget will be presented by the Minister for Parliamentary Affairs, Osei-Kyei-Mensah who was also named the caretaker Finance Minister on Thursday, March 11, 2021.
Finance Minister-designate, Ken Ofori-Atta is out of the country to seek medical care. He is also yet to be vetted by Parliament’s Appointments Committee.
The then Minister of Finance, Ken Ofori–Atta had made some projections regarding the Ministry of Trade and Industry for the year 2020.
Some areas that featured in his 2020 budget on the sector were the One District, One Factory initiative and the African Continental Free Trade Area (AfCFTA).
One District, One Factory
In the 2020 budget, the Finance Minister indicated that 232 projects were at various stages of implementation under the One District, One Factory Initiative.
It is expected that the government will give the exact number of factories that are either under construction or being constructed since different numbers have been bandied around since 2020.
Another aspect of this initiative that Ghanaians will expect to be highlighted in the budget is the number of jobs that have been created under the initiative.
The Minister for Trade and Industry, Alan Kyerematen during his vetting indicated that 139,331 jobs had so far been created under this initiative.
It is expected that the number of jobs the government will churn out will tally with Mr. Kyerematen’s earlier estimation.
The One District, One Factory initiative has been a subject of debate since its introduction.
The National Democratic Congress (NDC) has constantly claimed that the New Patriotic Party (NPP) government is taking over existing dams and factories and claiming them as part of their key campaign policies, but the government has consistently denied this claim.
African Continental Free Trade Area (AfCFTA)
As rightly predicted by Mr. Ofori-Atta in the 2020 budget, operations of the African Continental Free Trade Area (AfCFTA) took off in January 2021, following delays as a result of the COVID-19 pandemic.
As part of efforts to promote AfCFTA, Mr. Ofori-Atta, during the presentation of the 2020 budget had said government is focused on developing the automobile industry in Ghana through the AfCFTA initiative.
It is thus expected that the government will disclose whether this has been achieved or not.
Status of law banning importation of salvaged cars
Another controversial issue is the state of the law banning the importation of salvaged cars and vehicles older than 10 years.
The Customs Amendment Act 2020 was approved to among other things, provide incentives for automobile manufacturers and assemblers registered under the Ghana Automotive Manufacturers Programme.
The law however prohibits the importation of salvaged motor vehicles and cars over ten years of age into the country; a move resisted by automobile dealers in the country.
Government subsequently suspended the implementation of the law following fierce resistance.
The law is yet to be implemented, although it was supposed to have taken off in November 2021.
Former President John Dramani Mahama at the time called on the Automobile Dealers Union of Ghana to put pressure on the Akufo-Addo government to amend the Customs Amendment Act.
He was of the view that the suspended of the amended law was a ‘gimmick’ insisting that the Akufo-Addo administration may implement the law should it be retained in the 2020 polls.
“I’m telling the car dealers and the other people who will be affected that it is not a matter of suspension. Parliament is returning in October. The government should go back to Parliament and amend the Customs Amendment Act and take that clause out. That is what the government must do. It is not enough to suspend it.”
“It means that in future they can implement the law again and so what they should insist on is that the law should be amended and that clause should be taken out to show that it is not going to be implemented in the future. The suspension is a gimmick. It was supposed to start on 1st November so they’ve suspended it so that they (Automobile dealer) can vote for them and then implement it after the elections,” Mahama said at the time.
Expectations
Ahead of the reading of the budget, the Trade Union Congress (TUC) and Ghana Union of Traders’ Association (GUTA) have outlined what they expect government to touch on in the 2021 budget.
In an interview with Citi News, the Director of Research for the Trade Union Congress, Dr Kwabena Otoo said the 2021 budget should address government’s programmes to support those who lost their jobs as a result of the COVID-19 pandemic.
“I think a couple of things should be considered, but the most important thing is the lesson of COVID-19. It is important that the government introduces policies and programmes that would assist those who have lost their jobs, a training and retraining programme for those who have lost their jobs and the implementation of a national employment scheme. These are some of the things we expect the budget to address.”
Vice President of GUTA, Clement Boateng also called for the abolition of some taxes due to the COVID-19 pandemic.
“Coming from the background of COVID-19 which has had a very negative impact on our businesses, we expect some of the taxes to be abolished. Especially the 2 percent import levy which has been in operation for some time now. We expect it to be taken away because COVID-19 has had a very negative impact on businesses.”
Spare parts dealers in Ghana do not also expect the government to re-introduce the law banning the importation of salvaged vehicles into the country through the 2021 budget.