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Local fruit processors crumble - to under invoiced, declared & mis-described imports

Author: Maxwell Akalaare Adombila
From left: Mr James Asare-Adjei, immediate past President, AGI, Dr Yaw Adu Gyamfi, President, AGI, Mr Humphrey Ayim-Darke, Vice President in charge of SME, and Mr Kofi Nsiah-Poku, Executive Chairman, HealthiLife Beverages, at the press conference on February 1.
From left: Mr James Asare-Adjei, immediate past President, AGI, Dr Yaw Adu Gyamfi, President, AGI, Mr Humphrey Ayim-Darke, Vice President in charge of SME, and Mr Kofi Nsiah-Poku, Executive Chairman, HealthiLife Beverages, at the press conference on February 1.

The Executive Chairman of HealthiLife Bevergaes Limited, Mr Kofi Nsiah-Poku, says local fruit processors are on the verge of collapse, following the influx of undervalued, under invoiced and mis-described substitutes that are pricing their products out of business.

He explained in an interview on February 1 that these fraudulent trade practices were carried out by some importers with the connivance of some officers of the Customs Division of the Ghana Revenue Authority (GRA) and other persons in-charge of import valuation, duty collection and administration at the Tema Port.

Aided by the compromised officers, Mr Nsiah-Poku said “companies import these fruit juices and under invoice them; they only declare about 25 per cent of the import value, making sure that they undercut us in the market.”

The result, he said was a gradual contraction in the market shares or total collapse of the local fruit processing companies, leading to the laying off of some staff.

Although the GRA was aware of the practice, he said no action had been taken and that had resulted in the current fate of the fruit processing companies.

AGI press confab

He was speaking after the Association of Ghana Industries (AGI), had addressed the media on the need for the country to rise and speak against the rising incidence of under declaration, invoicing and mis-description of imports.

The association’s president, Dr Yaw Adu Gyamfi, said at the conference that these fraudulent activities were perpetrated by “some criminal-minded importers” who had found “cunning ways to evade taxes and duties through the connivance of some revenue officials at the Tema Port.”

The evidence

Using soya milk drink as an example, the Executive Chairman of HealthiLife said his outfit once confronted the Ghana Link with evidence of under invoicing only to be told that “when we are ready and the factory is running, then they can adjust the figures.”

“This is very ridiculous,” a disappointed Mr Nsiah-Poku said.

After investing some US$35 million to establish a state-of-the-art factory and another US$15 million to convert soya bean into soya milk, Mr Nsiah-Poku said HealthiLife’s existence was now under threat, as the cheap imports continue to shrink its market share.

The, challenge he said had forced HealthiLife to turn its attention to the Nigerian market, where it now exports about 65 per cent of its total produce.

“With regards to the fruit juice, we are able to produce here, ship to Nigeria to compete but we cannot compete in our own country. If we can produce here and ship it to Nigeria, which has the biggest market, it shows that we are very efficient.”

“We have created 100 jobs in Nigeria as we speak just for them to sell our products. If the business was good here, I am sure we would have created more than 100 jobs in the market for people who sell,” he said.

Govt’s posture not helpful

Speaking on how helpless his outfit was on the matter, a visibly distract Mr Nsiah-Poku, who founded Kinapharma Limited, said the government’s posture over the years showed that it was not prepared to do something meaningful on the issue.

“We have had series of discussions on this matter and they tried to do something and adjusted the figures but after three months, we got documents showing that everything is gone back. So, it seems that seem that government is not prepared to do anything.”

“Apart from the fact that it is killing our businesses, we expect that government will do something to save revenue for the nation, especially when we do not have sufficient money to run this nation,” he said.
Over the past three years, the Customs Division of the GRA has missed its annual revenue targets consistently, with last year being the worse.

In 2017, when the divison was tasked to collect GH¢ 13.94 billion, it only managed to collect GH¢12.69 billion, representing a shortfall of GH¢1.25 billion.