Ghana GLFMA: Seeks Chapter 98 Duty Relief for Raw Materials

• The Ghana Leather and Footwear Manufacturers Association (GLFMA) has petitioned Parliament for customs duty relief under Chapter 98 for raw materials.
• Local manufacturers currently face cumulative duties and levies of up to 36.1% on essential inputs like leather sheets and soles.
• GLFMA argues that imported finished footwear often enters Ghana at lower effective tariff rates, creating an unfair disadvantage for domestic producers.
• The association, representing over 12,000 artisans, warns that this tax structure threatens local jobs and strains the country's foreign exchange reserves.
• GLFMA has requested the Parliamentary Select Committee on Trade, Industry and Tourism to consider its proposals and offered to provide further technical justification.

The association points out that imported finished footwear frequently enters the domestic market either at lower effective tariff rates or through misclassification, creating an uneven competitive landscape.

The Ghana Leather and Footwear Manufacturers Association (GLFMA) has formally approached Parliament, seeking immediate policy changes and customs duty relief under Chapter 98 for raw materials crucial to the nation's leather and footwear industry. This significant move aims to address what the association describes as a substantial disadvantage faced by local producers due to the current tariff framework.

The GLFMA's appeal was conveyed through an official memorandum submitted to the Clerk to Parliament, specifically directed to the Parliamentary Select Committee on Trade, Industry and Tourism. This document, titled 'Urgent Policy Intervention: Customs Duty Relief under Chapter 98 for Raw Material Inputs in the Local Leather and Footwear Manufacturing Sector,' outlines the challenges and proposed solutions.

Representing a considerable segment of the industry, including over 12,000 registered artisans and 3,300 manufacturing workshops, the Ghana Leather and Footwear Manufacturers Association is advocating for a more equitable playing field. The association provided 20 copies of its executive brief, detailing its position and recommendations.

A core concern highlighted by the GLFMA is the existing tariff structure, which imposes cumulative duties and levies of up to 36.1 per cent on essential production inputs. These critical raw materials include items such as leather sheets, soles, rubber, and industrial adhesives, all vital for local manufacturing. This high import cost for raw materials stands in stark contrast to the situation for finished goods.

The association points out that imported finished footwear frequently enters the domestic market either at lower effective tariff rates or through misclassification, creating an uneven competitive landscape. Gilbert Akwasi Ntim, President of the GLFMA, emphasized that this disparity effectively creates an 'inverted tariff structure,' where the cost of importing raw materials exceeds that of some finished products.

Mr. Ntim warned that this current tax regime poses a severe threat to thousands of local jobs within the sector. Furthermore, he noted that the substantial outflow of funds for raw material imports, coupled with the influx of cheaper finished goods, places additional pressure on Ghana's foreign exchange reserves, impacting the nation's economic stability.

To support its request for Ghana GLFMA Chapter 98 duty relief, the association's memorandum provides comprehensive verifiable baseline data, economic impact projections, and actionable policy proposals. These insights are intended to demonstrate the tangible benefits of the proposed changes, particularly in safeguarding local manufacturing employment and alleviating foreign exchange pressures.

The GLFMA has formally requested that its memorandum be presented to the Parliamentary Select Committee on Trade, Industry and Tourism for thorough consideration during its upcoming sittings. Demonstrating its commitment to a collaborative resolution, the association has also extended an offer to appear before the committee.

During this potential appearance, the GLFMA leadership intends to deliver an oral briefing and provide detailed technical justification for its proposals. This proactive engagement underscores the association's determination to secure customs duty raw materials Ghana needs to thrive, ensuring a sustainable future for the local leather and footwear industry against the backdrop of Ghana footwear import duties.

Lawyers advising manufacturing or import/export clients in Ghana, particularly in the leather and footwear sectors, should monitor parliamentary proceedings for potential changes to customs duty rates under Chapter 98. A successful petition could significantly alter import costs for raw materials and the competitive landscape for finished goods.

Source: Original reporting via Ghanaian Times.