The Peasant Farmers Association of Ghana (PFAG) has expressed displeasure toward government’s step-back decision on reversing the benchmark value.

According to the Association, which has been advocating a complete reversal of the benchmark policy, government’s decision – to reduce it to 30 percent for general goods and 10 percent for vehicles – will not bring any benefit to the agriculture sector, which is one key contributor to the country’s GDP.

In an interview with the B&FT, Head of Programme and Advocacy of PFAG, Dr. Charles Nyaaba, said the Association is dissatisfied and does not support the decision, as they think it does not offer a solution or address concerns of the agriculture sector.

“We were in for a complete reversal for the benchmark value, and we listed a number of reasons why we think that the reversal was going to accrue to the benefit of the entire agriculture sector. But in response government rather reduced it to 30 percent, and we do not consider that as a final decision because we think it will not address the problem.

“In the middle of the crisis our cedi is depreciating, our fuel prices are going extremely high; one would have thought government could consider these,” he said.

Dr. Nyaaba further stated that local rice farmers are unable to sell their produce because of undue advantages the benchmark discount gives to imported rice – further adding the situation distorts production, resulting in loss of jobs.

“As we speak, we have a pile of local rice and farmers are struggling to sell because the benchmark value has given undue advantage to imported rice. So, why would you make your farmers struggle to sell?” he questioned.

He stressed that continuous reliance on importation is one of the reasons why the cedi cannot catch up with the dollar, and that government should have considered the economy’s current state before going ahead with the decision.

He said that the Association will engage further for a complete reversal of the benchmark value.

“Relying on importation is one of the reasons why the cedi cannot catch up with the dollar. So if we are saying that measures should be in place to ensure that local sectors like the agriculture sector are firm and able to produce enough for this country and reduce importation, then this is the time for government to listen to us for its own benefit and the entire country.

“Reducing it to 30 percent is what we have completely rejected; we don’t think that should be the case. We are preparing to use other strategies to ensure government completely scraps the benchmark value. We do not support the 30 percent,” he said.

Dr. Nyaaba further argued that the benchmark value will only be in favour of foreigners as against citizens, because Ghanaian importers are few.

“If you look at those who are importing and are benefitting from this discount, about 80 percent of them are foreigners….Ghanaians are just few,” he lamented.

Benchmark value

The benchmark value discount policy was introduced by government in 2019, in accordance with the World Customs Organisation policy of regular review of valuation databases.

Government, however, announced a reversal of the benchmark values and implementation of the reversal was to begin January 4, 2022 – but it was suspended by President Akufo-Addo to allow for wider stakeholder engagement.

After months of back and forth, government announced a reduction from 50 percent to 30 percent for general goods and 10 percent for vehicles. The new directive took effect on March 1, 2022.