The travails of Abossey Okai traders
The once thriving and vibrant hub of vehicle spare parts and accessories in Accra, Abossey Okai, is fast becoming a pale shadow of itself as it bears the full brunt of a combined effect of high duties and a weak currency.
Advertisement
The general worsening economic conditions have contributed in good measure to make the business of the vehicle parts dealers in the enclave of Abossey Okai very unprofitable.
The vehicle parts market, which is referred to as the hub of the spare parts business in the country, houses over 15,000 shops with each shop employing an average of two persons. This brings the total population in the area, which is almost the size of two standard football fields, to about 30,000 people, according to the Abossey Okai Spare Parts Dealers Association.
A visit by GRAPHIC BUSINESS to Abossey Okai on September 9, showed very little economic activity. The shops are experiencing massive sales downturn. While some of the spare parts dealers have closed shops in response to the down turn, others who still open their shops with a hope of a sunny day sometimes are struggling to make ends meet. The traders said the situation is so dire that it is a usual that a shop will not record a single sale in a whole month.
Traders complained that since January their sales turnover had dropped by about 70 per cent partly due to high cost of living, and the difficult economic situation in the country. Although the GRAPHIC BUSINESS cannot confirm the figure, a visit to the market on September 9 showed that the usual hustle and bustle which typify the market was almost absent. The shops are not as packed as they used to be barely a year ago and items are expensive.
“This business used to be very profitable, but it is getting worse by the day,” said Mr Michael Owusu Agyekum, a retailer at the Abossey Okai spare parts market.
Mr Agyekum, the owner of Opel House, explained that high import duties, the fast decline of the local currency against the US dollar, leading to high prices of the parts, had resulted in low sales, making the business less attractive nowadays.
High import duties
Mr Agyekum, who has been in the business for 16 years, said: “Those who go to Korea, England and Europe have all stopped. Those of us selling are not getting goods to sell and as a result, the few ones around are expensive.”
For instance, he said, clearing a 20-feet container of vehicle parts costs GH¢16,000, compared to the GH¢7,000 previously paid.
He cited a recent import of 40-feet container from Canada which cost GH¢40,000 in duties.
“The government should consider the traders when implementing policies. It should fix the duties because it is not stable at the moment; it keeps increasing on a weekly basis,” Mr Agyekum said.
According to him, the duty they pay is not fixed making their business very difficult for them to plan their business activities, in addition to the income taxes they pay.
Abossey Okai’s impact and contributions to the economy is diverse.
Beyond the employment, the area is a great source of income for other adjunct businesses such as restaurants, banking and microfinance as well asinsurance to complete the value chain of businesses. But things are fast changing for Abossey Okai business people.
The sub-sector, one of the worst hit by the cedi’s depreciation against major currencies, has forced most traders to stop importing because they cannot pay the import duties.
Bad situation
He said the virtual emptiness of the shops was due to their inability to import.
The GRAPHIC BUSINESS tour of the market confirmed that the brisk business that usually characterised the usually overcrowded market was absent. Instead, there was free movement of people and vehicles with some business owners idling by their wares awaiting what could be termed a “miracle.”
GRAPHIC BUSINESS also spoke with another parts dealer, Mr Daniel Dzisam, whose story was no different from that of Mr Agyekum.
He said business was bad to the extent that they had to increase the prices so they could make some profit.
“The system is so bad now. We have to sell a GH¢1 item for GH¢3 or GH¢4 in order for us to get some money for transportation back home,” he said.
According to him, traders have been receiving the punishment for the past two years and it appears there is no hope in sight for them.
Spare Parts Association
The Public Relations Officer of the Abossey Okai Spare Parts Dealers Association, Mr Clement Boateng, confirmed in a September 10 interview that the plight of the spare parts dealers had worsened, adding that some of the importers in the hub had to close their shops.
“Almost everybody is complaining about bad business because of the depreciation of the cedi against the major foreign currencies. Prices keep going up and people cannot afford to buy. Some people sit at the shops the whole day and sell nothing,” he added.
That notwithstanding, he said the association had channelled the concerns of their members to the Ghana Union of Traders Association (GUTA), the mother umbrella of all traders in the country, and was awaiting government’s action on their concerns.
GUTA highlights plight of traders
The Ghana Union of Traders Association (GUTA) has also complained about the plight of traders generally in the country.
According to the association, it is not only traders who bear the full brunt of the depreciation of the cedi, but consumers are equally suffering because if the goods are expensive, they cannot buy.
“Even as consumers, you experience difficulties when you buy, inflation is rising; the exchange rate is also not stable, while salaries of workers remain the same. Indeed, the business community is experiencing difficulties,” the President of GUTA, Mr George Ofori, told the GRAPHIC BUSINESS on September 10.
On the issue of import duties, he said it was surprising that although the Bank of Ghana (BoG) was against dollarisation, it still allowed Ghana Revenue Authority to index the custom duties in dollars.
“Once the dollar rate is not set, the duty will keep fluctuating and traders will very soon not be able to import,” he stressed.
According to him, as it stands now, government has no antidote for the declining currency, resulting in businesses being stifled while others have collapsed totally.
Writer’s email: [email protected]
GRAPHIC BUSINESS
{module share}