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Business News of Monday, 1 June 2015

Source: Graphic.com.gh

Demurrage, customs inspections cost burdens importers

The Deputy Minister of Transport, Mrs Joyce Bawah-Mogtari, has bemoaned the rising cost of demurrage and rent charges as well as customs inspections and movement of containers at the country’s twin seaports.

Consequently, she has called for a joint initiative between the importing community and the government to bring an end to the development.

At a consultative forum on the World Trade Organisation (WTO) Agreement on Trade Facilitation in Accra, she said data at the ministry showed that every year, demurrage and rent charges amounted to US$70 million and GH¢30 million respectively.

Also, because the Customs Division of the Ghana Revenue Authority insists on undertaking physical inspection of containers at the ports, Mrs Bawah-Mogtari said the cost of inspection had risen to GH¢160 million per annum, an amount the importing community bears.

Given that these costs are often passed on to consumers in the form of high prices, the deputy minister said the shipping community needed to partner with the government to stop the charges for the benefit of both sides.

That partnership, she said, could be in the form of the Advance Shipment Information (ASHI), an initiative of the Ministry of Trade and Industry (MoTI) and the Ghana Shippers’ Authority (GSA), whose implementation was recently stalled due to resistance from the shipping community.

Although most importers and exporters said the adoption of ASHI would lead to duplication of roles and costs, Mrs Bawah-Mogtari said at the forum that recent events had convinced the ministry that “ASHI is a good policy that is not only meant to facilitate trade to save shippers huge amounts in costs but also the most appropriate tool to deal with revenue leakages in the customs clearance system.”

“I am, therefore, confident that the ASHI has the potential to reduce these revenue leakages and facilitate trade immensely,” the deputy minister said.

She, however, declined to say whether or not the ministry and the Shippers’ Authority would resume negotiations to get the system implemented.

The WTO Agreement on Trade Facilitation was adopted in 2013 to improve the development of trade in member countries.

In Ghana, for instance, the adoption of the agreement is expected to reduce and harmonise the challenges associated with freighting, delays in clearance and their associated charges, among others, for the benefit of the country and shippers in particular.

While observing that the current WTO agreement took cognisance of the need for change in the way trading is conducted globally, the Chief Executive Officer of the Shippers’ Authority, Dr Emmanuel Kofi Mbiah, said Ghana, as a member of the organisation, should not remain with the old ways of conducting business.

Using the Port of Singapore as an example, Dr Mbiah said although its home country had a population of five million, it handled 32 million 20-foot equivalent units (TEUs) in 2013 compared to Ghana, which has a population of about 25 million, yet handled only one million TEUs in the same year.

He stated that Ghana could, therefore, capitalise on the WTO agreements by changing the way it conducts business at the ports to help raise cargo throughput – the amount of cargo passing through the two ports, annually.