Import Valuation and Firm-Level Entrepreneurship in Ghana: An Institutional Perspective

Abstract

The issue-based qualitative case study explores how isomorphic pressures from the preeminent trade governing body of the World Trade Organisation (WTO) and its affiliate the World Customs Organisation (WCO), shape the import valuation practices of the Ghana Revenue Authority-Customs Division (GRA-Customs). The thesis aims to highlight the Customs institution’s import valuation practices and explore its attendant influences on entrepreneurial disposition and opportunity perception in Ghana. The study spotlights impediments to entrepreneurial endeavours arising from the inconsistent application of import valuation rules, amidst widespread importer-declarant under-invoicing. The single case study’s design comprised three (3) embedded units of analysis, namely, the GRA-Customs, a freight forwarder (agents) and firm enterprises (importers) groups. The mostly purposively sampled respondents totalled twenty (20) across the board: eight (8) Customs officers, four (4) freight forwarders, and seven (7) importing firm enterprises. Additionally, a stevedoring company based in the Tema port was interviewed for contextual input. Customs valuation documents were collated and analysed to supplement respondent interview transcripts. Furthermore, a conceptual framework was developed to capture the hierarchical flow of institutional influence from the WTO/WCO through to the firm-level entrepreneurship (FLE) construct. The analyses of the findings yielded recurring, overlapping themes suggesting, among others, that the “transaction value” rule of the WTO valuation agreement (WTO-ACV) presents consistent, constraining administrative challenges for GRA-Customs. These challenges manifest as institutional voids that compromise the institution’s role in impartially supporting entrepreneurship to flourish in Ghana. Through the lens of institutional theory (IT), the study highlights how the WTO valuation agreement (WTO-ACV), in tandem with the influential WTO Trade Facilitation Agreement (WTO-TFA), apply normative and coercive isomorphic pressures on the GRA-Customs to achieve optimal global trade facilitation. The Customs institution, through its practices, thus engenders common behaviours amongst importing enterprises and intermediate freight forwarder agents, in ways deterrent to entrepreneurial development. The findings also reveal instances of government policy interference with normative WTO trade protocols, which then fosters an environment of uncertainty for entrepreneurial advancement, not to mention exacerbating an already inundated Customs bureaucracy. Henceforth, practitioners and policymakers can consider addressing the widespread issue of importer-declarant under-invoicing and Customs’ professionalism, to advance firm-level entrepreneurship in Ghana. This may be achieved through deepening transparency in the import processes of GRA-Customs for greater entrepreneurial confidence in the valuation practices. The case study thesis’ contribution to knowledge unveils otherwise obscure layers of Customs practices, within a challenging regulatory environment, that stifle firm-level entrepreneurship through inconsistent import valuation in Ghana.