Ghana’s steel sector can become the game changer

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Trucks in a convoy took a turn towards  the Accra-Tema motorway, heading south, loaded with iron rods and steel products from the Tema heavy industrial Area to feed construction sites springing up all over the country.

The  steel industries mostly located in the Tema- Kpong industrial enclave, resumed production after the coronavirus induced lock down.

Though, they had to leave their furnaces cold with caked molten, they paid staff full salaries and kept them employed.

These steel industries produce the fine products needed for construction and other forms of fabrication.

They have over the years invested heavily in environmentally friendly and energy saving  equipment as they offer relief packages to workers, stepping up their  social responsibiliity programmes to society and host communities.

Ghana’s steel industry offers the foundation for real industrialization especially in metallurgy which form the bases for the automobile and fabrication industry.

Apart from this potential, Ghana’s steel industry is also well positioned to feed the  West African sub region.

Available statistics indicate that  Ghana’s steel industry has an installed capacity of  more than one million metric tones.

Ghana’s domestic demand for steel products is only about 400,000 metric tonnes, leaving a huge excess of more than 600,000 metric tonnes which could be a source of crucial foreign exchange for the country.

The demand for these steel products in the rest of West Africa is huge and the starved market  will readily absorb the excess supply, making Ghana  a major exporter of steel products.

Available statistics indicate that iron and steel circles, rods, sheets and billets exported from Ghana increased by 108 per cent, representing  3.08 per cent of the country’s total non-traditional exports.

Ironically, iron and steel importation into Ghana  is on the rise, sapping away critical foreign exchange.

The logical thing for government to do is to pursue a protectionist policy by banning the  importation of iron rods and steel products which are produced locally to save jobs and foriegn exchange.

Government should also reduce drastically electricity tariffs for the sector. With the low price of oil on the international market feeding the thermal component of our electricity generation mix will not cost so much hence the need to pass on some of the gains to industry.

Cheap power and access to low interest rates on bank loans have  many foriegn companies  more competitive than our local industries. The imports coming in are from these business and industry friendly environments.

Apart from the economic contribution made by the steel industry through job creation and payment of taxes to the state, it can scavenge highways and street corners for abandoned  broken down vehicles which create accidents and deaths.

The manufacturers have already talked to government for this win win activity and it is the hope of most Ghanaians that it will see light.

As Ghana and the rest of Africa match towards   the African Free Trade Area Agreement implementation, we should look at the areas that give us competitive advantage in order to reap the full benefits of the continental  huge market.

The steel industry is certainly one of them and must be protected before we witness its total collapse.

Source: Business Ghana

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