Revenue improves after cancellation of GC-NET agreement -Alan Kyerematen
The Minister-designate for the Trade and Industry, Mr Alan Kwadwo Kyerematen, says the termination of an agreement with the Ghana Community Network System (GCNet) was meant to enhance revenue mobilisation and improve security arrangements.
According to the former Trade and Industry Minister, the cancellation of the agreement was also further to give way to a fully comprehensive integrated system.
Mr Kyerematen made this known when he appeared before the Appointment Committee of Parliament on Friday during his vetting. He said it was discovered that though some companies were providing different types of services, they were not fully integrated and coordinated from a central point.
In view of this, he said there was an urgent need to put in place a comprehensive and fully integrated end-to-end system that would provide operational efficiency for export and import. Lamenting further, he mentioned that through the new technology which received a lot of reaction from the public, Ghana realised an amount of GH¢1.6 billion within its first six months of operations.
“After the first month of deployment in July, there was an increase of 23 per cent over 2019. In August, there was 31 per cent increase, in September 34 per cent, in October 34 per cent, in November 25 per cent and in December 19 per cent,” he said.
Touching on the new Ghana-UK trade agreement, the nominee stated that it became necessary for Ghana to negotiate a new agreement with the UK. “Now under normal circumstances, this ought not to have been a contentious one regarding the long standing bond of friendship between Ghana and the UK,” he stated.
“We started technical consultations in March 2018 hoping that we could come to an agreement before the exit date of the UK from the EU”, he added. According to him, there were regrettable major differences of opinion between Ghana and the UK in respect of the content of that agreement.
He explained that one of the challenges was the UK’s position that Ghana already had an agreement with the EU of which UK was part. Providing further background to the issue, Mr Alan Kyerematen noted that if UK was exiting from the EU, then the principle of continuity ought to be invoked.
“Meaning that the provisions that were underpinning the agreement between Ghana and the EU should now be applied between Ghana and the UK and we had a major disagreement with that position of the UK,” he told the committee members.
It would be recalled that having exited from the EU, the UK had a major challenge to negotiate individual trade agreement with every country that the EU had a relationship with. Ghana, according to Mr Kyerematen, understood the challenge that the UK had and that was why they were using this alternative principle.
“But the reason why we disagreed with the principle of continuity was that the EU-Ghana agreement that I just referred to, is inconsistent with the provisions of customs union of ECOWAS”. Mr Kyerematen told the committee.
Technically, members of the ECOWAS customs union are barred from making individual trade negotiations without recourse to the union. Being a member of the union, Ghana, therefore, has no flexibility to negotiate outside the custom union without the concurrent of the customs union.
Interestingly, the UK also had absolutely no authority to negotiate outside the European Union while it remained a member of the EU. “So our position was that if we now have to sign an agreement with the UK, then it had to be consistent with the provisions of the ECOWAS customs union”. Mr Kyerematen explained.
He added “We went back and forth for almost a year at a level of Technical consultation until December 2020 when the UK was just about to exit and wanted to avoid a trade disruption between Ghana and the UK”
Ghana’s proposal according to the nominee, was the use of the original test of a regional economic partnership agreement that had been signed between the EU and the ECOWAS.
He stressed “We felt that that regional test should be the basis for the test of the agreement between Ghana and the UK, so that it would be consistent with the requirements of the customs union”.
The committee was informed that a common ground was finally found where the UK agreed to an exception to their principle of continuity and accepted Ghana’s position. Following the agreement, “They would accept our position to use the test of the regional economic partnership agreement as the basis for the new bilateral between Ghana-UK agreement,” he pointed out.
He disclosed that the president had given executive approval for the agreement, which had subsequently been forwarded to parliament.“UK government has signalled that on the 3rd of March, both countries would sign the new Ghana-UK agreement and then it will enter into force hopefully on the 5th of March”.
Ghana spends billions of dollars to import commodities such as rice, sugar and poultry into the country every year. The country’s inability to locally produce more of what is consumed, is what has given rise to the high levels of importation that has bedevilled the country for decades.
To stem the tide, the nominee mentioned that Ghana had the local capacity and the comparative advantage to produce the same commodities that are imported. This has underpinned the decision of the president to introduce a comprehensive programme that would lead the country’s industrial revolution with the introduction of 1D1F initiative.
He pointed out that comprehensive interventions have been put in place to ensure that Ghana could produce to export so as to reduce the over burden of importation. As part of the transformational interventions, Mr Kyerematen said that the capacity of the local business to be able to locally produce more for export and local consumption was being built.
1D1F to the rescue.
According to him, currently 232 factories under the government’s flagship programme, One District One Factory projects are at various stages of completion across the country.He maintained that the 1D1F initiative was meant to build new factories and also augment and strengthen already existing companies .
He stated that out of the 232 factories dotted around the country, 168 companies are relatively new while 64 are old ones. He said 76 companies built out of the 1D1F initiative are currently in operation while 107 are still under construction.
Forty nine projects, he said, were due for commencement of construction in the first half of this year of which 56% would be Agro Processing, 22% would be general manufacturing, 5% would be meat processing while Agriculture and industrial enterprise would make up of 17%.
Mr Kyerematen indicated that the 76 companies in operation have so far, created 139, 331 direct and indirect employment opportunities with an anticipation that additional 285,915 would be created by the projects that are under construction.
“Mr Chairman, through this initiative, we have been able to mobilise GH¢2.3 billion from local financial institutions and government has provided interest subsidy payment of GH¢213million”. Government, through parliament, he continued, has additionally granted GH₵603 million as import duty exemptions to 37 1D1F companies.