High electricity tariff killing local steel industry - SMAG

The Steel Manufacturers Association of Ghana (SMAG) has expressed concern about the recent increase in electricity tariff saying it is having adverse effect on the growth and development of the industry.

Members of the Association yesterday were at the Parliament house to meet joint Parliament committees on energy and trade and industry after they had earlier petitioned the speaker of parliament over the recent increase in electricity tariff.

The Executive Secretary/Consultant of the Association, Rev. Dr George Dawson-Ahmoah, who spoke to the press after the presentation, underscored the strategic importance of the steel industry to the economy hence the meeting with Parliament to discuss the challenges which was causing unrest in the industry.

Rev. Dr Dawson-Ahmoah highlighted two confronting challenges namely: increase in electricity tariff of over 92 per cent and the ever-increasing importation of steel into the country.

“We are saddened by the fact that the number of Steel manufacturing companies in Ghana were 8 but 2 of them have recently collapsed because of these unfavorable business conditions,” he said.

He said “It is worthy to note that the local steel industry employs about 3,000 direct workers and 10,000 indirect workers. The companies also contribute significantly towards government revenue in the form of taxes.”

Rev. Dr Dawson-Ahmoah, who doubles as the Executive Secretary of the Chamber of Cement Manufacturers, stressed that the steel industry also uses local content by providing job for over 10,000 scrap dealers and it was expected to consume about 1.2 million tonnes of scrap for production annually.

The installed capacity of the local steel industry is about 1,200,000 metric tonnes per annum against an annual average demand of about 350,000 Metric tonnes per annum which results in a surplus of 850,000 metric tonnes per annum.

“How can we kill such an industry by encouraging importation of finished steel products when it has such a huge surplus capacity,” he questioned.

Rev. Dr Dawson-Ahmoah, on behalf of the Association, called on the government to immediately suspend the increased electricity tariff until a proper in-depth inquiry was made to ascertain the proper assessment.

“Our checks have it that some of our neighbouring countries pay as low as 0.9 Cent per Kw/h of electricity so until the enquiry is concluded we are requested that the old tariff of Gh₵0.41 must be maintained as an interim tariff,” he said.

On the issue of the illegal importation of steel products into the country, the Association is appealing to the government for a legislative instrument (LI) which will introduce quotas to regulate the importation and also to introduce/impose certain levies as safeguard measures on importation to protect the local steel industry.

“Countries such as China, Egypt, Ethiopia, Nigeria and Congo have instituted such measures and Ghana can take a cue to protect our dear local steel industry from collapse,” he said.

Members of the Steel Manufacturers Association of Ghana include: Sentuo Steel Company Limited, Tema Steel Co. Ltd, United Steel Company, Rider Steel Ltd, Ferro Fabrik Limited and Fabrimetal Ghana Limited.


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