Ghana, UK must finalize trade deal to save jobs

Economic news for Monday, February 1, 2021

Source: Ghanaian weather

2021-02-01

Fairtrade Africa has urged the governments of Ghana and the UK to finalize a trade deal to save fruit exporting companies.

Ghana and the UK failed to finalize a trade deal before the end of the BREXIT transition on December 31, 2020.

He said that while he welcomed the joint announcement by Ghana’s Department of Trade and UK Department of Commerce earlier this month that an agreement had been reached to allow duty-free access, the delay had a negative impact on the players in the sector.

“We call on the UK and Ghanaian governments to immediately sign an agreement to put this into effect. Fairtrade Africa is also asking that exporters be compensated for tariffs already paid as it will be unfair for them to bear the brunt of the delay by the two governments in finalizing a deal, ”he said in a statement.

Established in 2005, Fairtrade Africa is the independent, non-profit umbrella organization representing all Fairtrade certified producers in Africa.

“Fairtrade Africa demands that the government of Ghana involve all key stakeholders, especially producers, in the negotiation process and ensure that they are fully and promptly informed about the negotiation process,” he said. declared.

These demands, according to Fair Trade Africa, would collectively ensure that jobs are not only protected or secure, but that new jobs are created and that Fairtrade plantations can deliver on their commitment to pay workers a living wage.

“Fairtrade Africa is committed to supporting its members in advocating to remove bottlenecks in trade that negatively impact livelihoods. By working with all stakeholders from different sectors, both in the public and private sector, we ensure that our member organizations thrive in order to support their workers and communities, ”he said.

It is estimated that more than 15,000 direct and indirect jobs are currently negatively affected due to the failure of Ghana and the United Kingdom to sign a post-Brexit trade deal that allows Ghanaian fruit growers duty-free access to the market. British as it exists under the economic partnership. Agreement (EPA).

Mr. George Kporye, director of corporate affairs at Golden Exotics, expressed in an interview his concern over the high tariffs being paid, adding that “tariffs should be canceled in the meantime and the deal reached in days rather than weeks. “.

He said: “We had to reduce volumes due to the uncertainties of getting a deal done on time.”

This means exorbitant tariffs for Ghanaian exporters of bananas, cocoa and other fruits who now trade under the Generalized Scheme of Preferences (GSP). For the banana sector, exporters who previously traded under the Economic Partnership Agreement (EPA) with the EU, without payment of customs duties, must now pay a tariff of £ 95 per tonne of banana.

The relevant companies that are Fairtrade certified producers and members of Fairtrade Africa (FTA), namely the network of all Fairtrade certified producer organizations in Africa and the Middle East, are: Golden Exotics Limited (GEL), Volta River Estates Limited (VREL) and Blue Skies Company Limité.

These Fairtrade certified producer organizations together employ more than 5,000 direct workers and create more than 10,000 indirect jobs.

The Ghana Banana Producers Association is made up of 3 companies; Golden Exotic Limited, Musahamat Farm Limited and Volta River Estates Limited located in Greater Accra and Eastern regions with an area of ​​approximately 2,500 hectares and a workforce of approximately 4,500.

According to Mr. Kporye, these companies also provide 10,000 additional indirect jobs.

The industry has been actively exporting bananas for 26 years to the EU market to which the UK belonged until the entry into force of BREXIT on 1 January 2021.

Two of these companies are Fairtrade certified and in total the three companies export around 85,000 tonnes of bananas per year, of which around 60 percent of exports go to the UK market.

The delay by the Ghanaian and British governments in reaching and signing an agreement to allow duty-free access for these producers to the UK market means an increase in the cost of their business resulting from the very high tariffs they are required to pay since January 1, 2021.

Golden Exotics Limited (GEL), which exports around 45,000 tonnes of Fairtrade and organic bananas to the UK each year, had to pay a duty of £ 17,000 on its first post-Brexit shipment to arrive in the UK this year.

Ghanaian plantation Volta River Estates Limited (VREL) exports around 9,500 tonnes of Fairtrade certified bananas to the UK each year for sale in Co-op supermarkets and Waitrose have paid a duty of £ 16,000 on weekly shipments of nine containers of bananas.

An additional £ 53,000 has been paid for three more deliveries since then.

Anthony Blay, Director of Agric, VREL, said: “Volta River Estates exports around 85% of its volume to the UK, having developed long-term business relationships with the COOP and Waitrose supermarkets.

“The company cannot survive at this level of tariffs, even in the short term, endangering the jobs of its 700 direct employees,” he said.

He said Ghanaian banana exporters risked losing their market to other African exporters who were able to negotiate a transition deal with the UK before the deadline and therefore were not subject to duty payment.