Ghana has joined nations in the sub-region who banned the exportation of ferrous scrap metals in order to feed their respective local steel industries. The nation achieved this feat when on the 25 th of March, 2013, parliament passed the law to make it an offence to export ferrous scrap metals.
The countries already enjoying the ban are Nigeria, Ivory Coast, Kenya, Cameroun and Zimbabwe. With this, Minister of Trade and Industry, Hon. Haruna Iddrisu has delivered on his promise to ensure that the law on the exportation of ferrous scrap metals is passed in order to protect the local steel industry.
He made the promise when he met members of the Ghana Steel Manufacturers Association and Scrap Dealers Association at the ministry few hours after he was sworn-in as sector minister.
In that meeting, Hon. Iddrisu was emphatic to lay the bill in Parliament and to make sure it becomes a law within the 30 working days after his assumption of office on the 7 th of February, 2013, the same day of the interaction with the stakeholders.
Now that the law has been passed, the hope is that a monitoring team which is going to be put in place to check illegal exportation would equally perform, as the sector minister has lived up to expectation and with enough raw material to feed the industry.
Reports are that at least 2,000 more workers are going to be employed in the industry. The nation, we gathered is also going to save foreign exchange on importation of billets from outside.
The Ferrous Scrap Metals (Prohibition of Export) Regulations, (L.I.2201) 2013 was laid in Parliament on 22 nd February, 2013 by the Hon. Minister for Trade and Industry in accordance with Article 11 (7) of the Constitution.
The Legislative Instrument was subsequently referred to the Committee on Subsidiary Legislation for consideration and to submit report pursuant to Orders 77 (a) and 166 of the House.
The Committee met with the Hon. Minister for Trade and Industry, Mr Haruna Iddrisu and Officials of the Ministry to consider the Regulations. In attendance were Officials of the Drafting Division of the Ministry of Justice and Attorney-General’s Department.The Committee is grateful to all the Officials for their attendance and input in the deliberations.
Ferrous metals contain iron and have properties that prevent corrosion. They often contain slight quantities of other metals or other elements which produce the required properties. Globally, ferrous scrap metals are used for engineering purposes and for the manufacture of cutlery, surgical instruments engine blocks and manhole covers.
In Ghana, ferrous scrap metals which include steel and their alloys are mostly obtained from obsolete machinery or equipment, household steel products and packaging materials.
Other sources of the metals include metal waste which contains iron, carbon, chromium, manganese, nickel, molybdenum, wolfram, silicon and vanadium.
Research has shown that the country’s scrap generation is enough to meet the demand of existing industries. In 2001, about 110,000 tonnes of scrap metals were found to be available in the country.
There are several large scale steel manufacturers in the country such as Tema Steel Western Castles and Western Steel and Forgings which utilise ferrous scrap metals as their primary raw materials.
Again, there are several small scale metal fabrications in the country such as those located at Suame and Kokompe in Kumasi and Accra respectively. These companies provide direct and indirect employment to a significant number of people in the manufacture of metal gates, coal pots and metal chairs among others.
Notwithstanding the enormous contribution of these companies in the economic development of the country, steel companies continue to be deprived of the needed raw materials and this compels them to operate below capacity due to the inadequate supply of the raw materials in the country. This situation is as a result of the uncontrolled export of large volumes of scrap metals out of the country.
Administrative Ban
In 1980, the Ministry of Trade and Industry placed an administrative ban on the exportation of ferrous scrap metals in an attempt to protect the local steel industry.
In2008, some flexibility was introduced to allow some quantities of ferrous and non-ferrous scrap metals to be exported and every potential exporter was required to submit an application and some specific documentation on the operations of the exporting company for consideration before being granted permission.
Subsequently, the Ministry introduced the Exportation of Non-Ferrous Scrap Metal Regulations, 2010 (L.I.1969) which sought to regulate the exportation of non-ferrous scrap metals.
Consequently, the minister responsible for Trade and Industry in accordance with Sections 12 and 13 (a) of the Export and Import Regulations, 2013, to give effect to the administrative ban which has been in existence for over two decades.
The Instrument seeks to prohibit the export of ferrous scrap metals in the country. It further prescribes the punishment upon conviction. It also provides for the establishment of a Ferrous Scrap Metal Monitoring Committee.
The Committee observed the fact that significant investment has been made
locally to process scrap metals for the production of metal products, especially for the construction industry to ensure that such businesses have sufficient raw materials for production.
Again, the Committee noted that ferrous scrap metals serve as a major source of raw materials for the local steel mills and foundries and, due to the unavailability of the raw materials; these companies have been compelled to operate below capacity.
The Committee was also informed that the uncontrolled export of scrap metals has resulted in the shortage of these raw materials. In this regard, a ban on the exportation of ferrous scrap metals would ensure that local companies would have the required quantities of the scrap metals for their operations.
This would also enhance the profitability of the companies and increase their capacity to create employment and also reduce the foreign exchange expended on the importation of billets as raw materials for steel mills in the country.
The Committee was informed that the Ministry of Trade and Industry has carried out extensive
consultation with Scrap Metal Dealers, the Steel Companies and other Stakeholders in the
Industry and have instituted measures to ensure that metal dealers are treated fairly. The prices of
metals have been agreed amongst the stakeholders and the Ministry is in the process of
harmonizing the prices of the materials and assured that the prices would be internationally
competitive.
The Committee has thoroughly examined the Regulations and is of the view that the Regulations are consistent with the general objects of the Constitution and the Export and Import Act, 1995 (Act 503). The Committee accordingly recommends that the Ferrous Scrap Metals (Prohibition of Export) Regulations, 2013 (L.I.2201) come into force at the expiration of twenty-one sitting days.