Importers rebag Asian goods as ECOWAS produce

THE GRAPHIC BUSINESS has learnt that some traders are abusing the import exemptions granted them under the Economic Community of West Africa States (ECOWAS) Common External Tariff (CET) programme by rebagging imports from Asia and tendering them in as West African produce to be able to escape payment of duties.

The traders, usually importers of finished goods, are taking advantage of the lousy implementation of the CET to flood the market with repackaged goods imported from Asia under the guise of manufacturing them in an ECOWAS member state.

The move allows the importers to unduly enjoy some tax exemptions under the CET regime.

The CET is to ensure that the same tariff be slapped on an eligible item imported into the ECOWAS sub-region, irrespective of which ECOWAS member country it lands in. It is also to promote manufacturing in the sub-region by granting import exemptions on goods manufactured in an ECOWAS member state.

Although the CET was adapted to offer special protection measures aimed at addressing any trade imbalances across the sub-region, the paper understands that some traders are abusing the protocols under the programme.

The President of the Ghana Union of Traders Association (GUTA), Dr Joseph Obeng, told the paper that such practices were short-changing Ghanaian importers.

“They repackage Asian products in their countries and ship them here as though they had manufactured them in an ECOWAS member state to enjoy tax exemptions,” he said.

He added that the practice was giving undue advantage to foreigners over local importers.

In the past, due to the tariff differences within the ECOWAS member states, importers preferred trading in West African countries where tariffs were lower instead of their original home country.

The CET was supposed to check such practices and among other things encourage the trade in goods manufactured in the sub-region.

Abuse across board

An expert in the maritime industry, Dr Kofi Mbiah, in a separate interview, said the practice was having a negative effect on the value addition business across the sub-region.

He told the GRAPHIC BUSINESS on August 18, this year, that Nigerian officials were also complaining about similar abuse under the programme which was crippling trade in finished goods as genuine manufacturers were having difficulties exporting their produce into some ECOWAS states.

Dr Kofi Mbiah — Maritime Expert

“The Nigerians are also complaining and as a result some people who are producing genuinely even from Ghana are having difficulties exporting into Nigeria because the Nigerians are also claiming that people are bringing in repackaged foreign goods to enjoy the ECOWAS lower tariffs,” he said.

As a result he encouraged the government to shore up its monitoring role to eradicate such abuse of the programme.

“Without that we cannot grow our manufacturing base,” he said.

Review

However, at a meeting with GUTA in June this year, a Deputy Minister of Finance, Mr Kwaku Kwarteng, assured traders in the country that the government was working on reviewing tax exemptions it had granted under the programme to ensure fairness.

With the review, some exemptions granted importers would be substituted with other ones that were more suitable.

The review, he said, had become the best option as the government had “almost exhausted” the tax exemption quota.

“We did something for our friends at Abossey Okai and the spare parts; we have done something for raw materials and for production of medicine.

“The policy guidance we have from the government is that we take a second look at the range of exemptions that we have granted under the CET and to see which ones we can begin to switch,” he said.

Trade policy

The ECOWAS CET was implemented to provide better trade policy across the sub-region.

This includes applying special protection measures aimed at addressing any trade imbalances across the member states thereby providing a real boost to the manufacturing sector and trading in general.

The CET was also aimed at ensuring transparent customs procedures, reducing border delays and facilitating intra-regional trade.

The decision to have a Common External Tariff was taken at an extraordinary meeting of Conference of Heads of State and Government of the ECOWAS held in Dakar, Senegal, on October 25, 2013.