”Take Strategic Steps to Stabilize The Depreciation of The Cedi”- Water Producers To Government
The National Executive Committee Of the National Association Of Sachet and Packaged Water Producers (NASPAWAP), has called on the government to employ strategic measures to halt the depreciation of the cedi against major trading currencies.
The association in a press release today, October 20, said the free fall of the cedi against major trading currencies especially the dollar is taking a toll on their businesses since they use the dollar to import most of the products they use in production.
“The packaged water industry relies heavily on imported plastic pallets/granules used in the manufacture of the Polythene films and pet bottle preforms, that are used to package the treated water for consumers. It is important to note that Packaging alone forms about 60% of the production cost for sachet and bottled water.
NASPAWAP bemoaned the increase in fuel prices and utility tariffs in the country, saying it is costing them more to transport and distribute packaged water to market centers across the country.
“Diesel fuel used for distributing the packaged water to market centers for consumers was around 15% of the product cost as of the third quarter of last year. Due to the high increase in Diesel and other petroleum products, Diesel fuel for distributing packaged water to consumer centers now exceeds 25% of the product price.
“Electricity cost which used to be around 15% of the product price has increased to 20% of the product price as a result of the recent increase in utility tariffs,” a portion of the statement said.
It noted that the water producers industry is running on levels that are no more sustainable per new prices of their products announced in September 2022.
“Without even considering the cost of capital, Salaries, wages, taxes, bank charges, regulatory fees, machine and equipment cost/depreciation/parts replacement, distribution vehicles and its maintenance costs and other overheads. Obviously, the last price announced in September is nothing to even meet the break-even cost of the packaged water industry. As a result, the industry is accumulating debt in its operations to levels that are no more sustainable,” it explained.
The association suggested measures for the government to take in order to avert the total collapse of the industry.
- Reduce taxes on the packaging materials for the industry.
- Review the import and customs duty formula for the raw materials imported for the packaged water industry.
- Freeze payment of VAT, Excise tax, and other taxes on the packaged water industry.
- Freeze government charges and fees for the packaged water industry and if possible, subsidize the Electricity and water bills of the industry.
- Remove completely all taxes on reusable jar bottles used for the dispensing machines.
- Call on the Bank of Ghana to be circumspect in the adjustment of the policy rate which is increasing the cost of borrowing from the banks.
It entreated the government to come to their aid as water is an essential product that one cannot do without as many households depend on packaged water as the main drinking source, reported by the Ghana Statistical Service.
“The packaged water industry was at the forefront during the covid 19 outbreak, potable water is an essential product, and the industry goes to all lengths to ensure that it provides premium products to the public and it is important that as we are in distress, the government comes in to provide the needed support to ensure good health of the citizens.
The release added “Leadership of the packaged water industry will continue to update the public on the challenges, and if the government did not attend to the call by a week from today, we will have no option but to pass on the cost to the public and possible shutdown of production and distribution for a week across the country.