The local textiles industry risks total collapse if urgent steps are not taken by the government to halt the upsurge in the smuggling of foreign substitute into the country, the Textiles, Garment and Leather Employees� Union of Ghana Federation of Labour, has warned.
Aside from the negative impact of smuggling, the union said high interest rates, high energy tariffs, absence of export subsidy and high cost of raw materials were making the local industry uncompetitive.
At a news conference in Accra yesterday, on the escalating illegal activities of some local traders and their Chinese counterparts, Abraham Koomson, General Secretary of the union, called for a level playing field to make the Ghanaian industry competitive. That would stem the heavy revenue losses, collapse of factories and loss of jobs that have ben the lot of local industry.
The news conference comes barely a week after the police reportedly intercepted four cargo trucks loaded with wax prints believed to be imitated products of some of the leading textile manufacturing companies in Ghana. The drivers were arrested last Thursday at a warehouse at Tudu in the Central Business District of Accra while they were discharging the prints believed to be imported from China and routed through neigbouring Togo.
Mr. Koomson said workers in the industry lived in constant fear of losing their jobs due to the illegal activities of people in the textile trade. �The fears of the workers are genuine because the sector which used to employ about 25,000 workers in the 1970s has only 3,000 workers in employment now, made up of casual and permanent staff. �The resultant revenue losses to the state amounts to over GH400 million annually as of now�, Mr. Koomson stressed. Explaining the high cost of textile products in Ghana, the General Secretary said unlike Ghana, the Chinese government gave export and energy subsidies to their manufacturers. Besides, the interest rates were relatively lower in China (between five and seven per cent) compared to Ghana�s 30 per cent plus high cost of raw materials.
All that we are asking for is level-playing field to ensure that people use the approved entry points to bring textile products into the country so that the necessary taxes can be levied on their products�, said Mr. Koomson. To stem the increasing rate of textile smuggling and the design pirating, Mr. Koomson called for the establishment of a task force comprising representatives of the security agencies, Ghana Standards Board, the local manufacturers and the trade union to conduct periodic checks at the point of sales. He acknowledged the role being played by the police and CEPS in combating the smuggling of textiles into the country, but said the uncoordinated operations of the security agencies had rendered their efforts ineffective.
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