The Ministry of Trade and Industry has since June 2018, been fighting for a lasting solution to the critical challenges affecting the textiles industry in Ghana with the introduction of Six Measures to reform the textiles sector.
The local textiles industry used to be very vibrant, providing over 30,000 jobs in the last three decades. Today, it employs just about 5,000. The grave influx of cheap pirated designs and gross infringements on trademarks of local textile manufacturers have been identified as the key cause of the woes of the textile industry in Ghana.
Many unsuccessful attempts have been made over the years during various administrations to fight against piracy and the infringements of Intellectual Property rights faced by the domestic industry, including the setting up of a Task Force on the Seizure and Destruction of Pirated Ghanaian Textile Designs. However, the operations of the Task Force were challenged, creating more problems.
It became appropriate to halt the activities of the task force at that time to rather find more lasting solutions to the challenges of the industry.
In the light of this, the Ministry of Trade and Industries led by its sector Minister, Hon. Alan Kyerematen, together with all the stakeholders in the Textiles Sector, on Wednesday October 12th 2022, launched the National Roll-out of the Textiles Tax Stamps programme, which is one of the measures to revive the local textiles industry.
In his statement at the launch which took place in Accra, at the Greater Accra Metropolitan Assembly, Hon. Alan Kyerematen, under the Ministry’s Industrial Transformation Agenda, announced the Six Policy Measures which the textiles tax stamp forms part.
He posited that, “These policy measures aimed at finding lasting solutions to the challenges and also strengthening the textiles sector which can create millions of well-paid jobs for many Ghanaian youth.
They are: Introduction and implementation of textiles tax stamps; The Introduction of tax stamps on textiles is critical to give buyers the confidence and assurance that they are buying genuine fabric. It would also ensure that the smuggled African textile prints which intend make our locally produced prices uncompetitive are reduced the in the market and the right duties paid.
Import management systems;
The Introduction of a new import regime and restrictions management for textiles is to ensure that entry of pirated designs are restricted. Let me assure you that this measure is not in any way meant to unduly restrain imports. We currently do not have the local manufacturing capacity to meet the total national demand of over 120 million yards per annum out of which 35% is produced locally. The system for acquiring textiles tax stamps has been developed with the help of the Intellectual Property Office to ensure that legitimate textiles are traded on the local market.
Introduction of Designated Entry Corridors (Tema Port and Aflao Border for textile imports)
By this, all imported textiles would be required to enter the country through dedicated corridors; Tema and Aflao which have been fitted with affixing facilities and other needed equipment to keep track and ensure that imported African prints adhere to standards.
Provision of Incentive Packages for local manufacturers to make them competitive. The Ministry engages the local manufacturers to consider areas of collaboration and Government intervention to reduce inefficiencies and to ensure low cost of production and competitive pricing of wax prints. Currently, local Manufacturers benefit from zero-rate VAT granted in January 2019 which has been extended to December 2023.
Attract Foreign textile manufacturers to set up or relocate their plants in Ghana; Similarly, Government continuously creates the necessary environment and engagements to encourage foreign firms including textile manufacturers to set up in Ghana.
Reconstitute the Task Force to embark on effective market monitoring and surveillance.
The Operation of the Textiles Task Force will be reviewed. The revision would ensure that stakeholder membership on the Task Force is adequately representative.
The Textiles Task Force would undertake Monitoring exercises on all markets after the inception of the effective enforcement date scheduled for 1st March, 2023.”
Hon. Kyerematen, emphasized that, it is in the interest of the Government and Ghanaians in general, to see to the development and growth of domestic manufacturing in order to take full advantage of the AfCFTA which has a market size of over 1.3 billion people with combined GDP of more than $3.3 Trillion US Dollars.
Saying, “We have come this far as a result of the collaborative efforts of the Ministry of Finance and Ghana Revenue Authority (GRA) which is the key implementing agency. The Intellectual Property Office and the Ghana Standards Authority are not forgotten in this process.
We are here this morning to officially initiate the roll-out of the textiles tax stamps which takes effect on 1st November, 2022. However, the manufacturers have the option to start affixing the stamps on their product before this date.
I wish to state that the success of the other policy measures hinges on the effective implementation of the textile tax stamps hence I wish to kindly appeal to all stakeholders to support the implementation of this programme.”