OPERATIVES in the timber industry have joined the growing rank of workers’ unions in the mounting agitation for a downward review of the utility tariffs recently announced by the Public Utility Regulatory Commission (PURC).
After a crucial meeting between the Ghana Timber Millers Organisation (GTMO) and the Timber Workers Union (TWU) of the Trades Union Congress (TUC) in Kumasi at the weekend, it was resolved to lay off 50,000 workers this year for the companies to remain in business and cope with the high utility tariffs.
It comes on the heels of an ultimatum from the Industrial and Commercial Workers Union (ICU) of the TUC to begin a nation-wide industrial action from July 28, 2010 if the tariffs were not reduced by then.
The timber companies said sharp increases in the industry’s major costs, especially electricity tariffs, over the past eight years had resulted in the closure of about 70 per cent of timber firms in the last five years, with more heading in the same direction.
A joint statement issued at the end of the meeting said “some of the timber companies are paying as much as GH¢300,000 in electricity tariffs a month, from the previous figure of GH¢100,000”.
It said the only option left for their survival was to lay off some of their workers.
“It is sad that the timber industry, which is the largest single employer in Ghana, providing employment in both rural and urban areas, is suffering such a fate,” it said.
The statement, signed by Mr E.E.K. Acquah-Moses, the Chief Executive Officer of the GTMO, and Mr Joshua Ansah, the General Secretary of the TWU, said with fuel already constituting about 10 per cent of the companies’ operational cost, the tariffs, as announced by the PURC, had compounded the difficulties facing the companies and wondered how they could survive under such circumstances.
The timber industry, the only renewable natural resource industry in Ghana, contributes about seven per cent to the Gross Domestic Product (GDP) and it is the fourth major foreign exchange earner, with receipts averaging more than 180 million Euros annually.
The bane of the industry, according to the press statement, started with the government’s introduction of the National Reconstruction Levy in 2001 which dealt a big blow to it, as it was charged on the gross revenue of the companies, instead of their profit, resulting in a depression in the industry, with most timber firms being forced to fold up.
It stated that since Ghana contributed only one per cent to the international market in tropical timber, it was not possible to pass on increases in local costs to that market.
“The reality is that companies cannot continue to incur losses. Ultimately, the industry will have to throw workers on the streets and create more unemployment,” it said.
On the domestic market, the statement said although the price of sawmill lumber represented the actual cost of the commodity, consumers preferred illegal chain-saw lumber because they were cheaper, adding that further increases in the cost of sawmill lumber occasioned by increases in electricity tariffs would worsen the already destructive activities of illegal chain-saw operators.
It also spoke against high interest rates and said it had resulted in low investment, a situation that had resulted in most companies turning to secondary products, instead of tertiary products that could generate more revenue for the state.
It stressed the need for the government to direct its energies at growing the private sector through policies and interventions that would enable companies to expand, re-invest profits and pay taxes to the state.
“We also expect the government to persuade the financial institutions to bring down their interest rates so that entrepreneurs can borrow and invest in the manufacturing sector of the economy,” it said.
The ICU, for its part, said the government needed to suspend the tariffs by July 28, 2010.
The warning was part of a resolution adopted at the end of a meeting of the union in Accra.
It warned that should the PURC fail to meet the deadline for the suspension of the new tariff regime, its members would be organised in mass public protests to achieve same.
According to the ICU General Secretary, Gilbert Awinongya, ICU members were convinced that the hikes were unbearable and must be reversed.
He said members were also troubled that the government had removed the subsidies which they enjoyed.
He demanded that the new tariffs be suspended and the status quo reverted to.
“We are saying that on or before the 28th of July we want a resolution of this. After that, on the 29th, the national union will be going on a nation-wide demonstration,” he said.