Govt to reduce port turn-around time -Veep

Dr. Mahamudu Bawumia

Dr. Mahamudu Bawumia

Vice President, Dr. Mahamudu Bawumia has pledged the government’s commitment to reduce the turn-around time at the ports to avoid punitive charges such as demurrage.

He said although demurrage generated more revenue for the state, they were unfair costs to businesses and stressed the need to remove that burden from businesses.

Speaking on the topic ‘improving port efficiency and trade facilitation in Ghana’ at a conference in Accra yesterday, the Vice President observed that the average turn-around time for vessels at the Tema Port was 103 hours, while Europe and East and North Asia were 25 hours and 17 hours respectively.

The conference was a platform for stakeholders to discuss and outline real and practical ways to address port efficiency issues to the benefit of businesses, grow the economy as a whole, and create jobs.

He said renewed researchers Brian Slack and Claude Comtois, who revealed the statistics in their report on “Ships Time in Ports, an International Comparison,” noted that the average turn-around time in developed African countries such as South Africa was 64 hours.

“Clearly, we have some long way to go. Our Government would work with the Ghana Ports and Harbours Authority and other stakeholders towards the realisation of the objectives of the Tema and Takoradi port expansion projects as these are in consonance with our rapid industrialisation agenda.”

“On the cargo clearance front, the improvements have been very slow. Cargo dwell time is still high compared to ports in South Africa let alone talk about Asia and even Europe. We still have delays in the clearance of goods and the attendant costs such as demurrage and rent.”

“In 2016 shippers (importers) paid an estimated amount of 100 million dollars in demurrage charges. I am told that the last time a similar estimate was conducted in 2013, the demurrage amount was about 75 million dollars,” he said.

According to him, although demurrage charges generated revenue for the government, they were not the kind of revenue needed to build the country.

He said such punitive costs could be avoided if measures were taken for shippers to release their containers to the shipping lines in good time.

Aside demurrage, he observed that there were other inefficient and nuisance costs, including those used in facilitating clearance through the regulatory agencies and Ghana Revenue Authority (Customs Division) itself.

“These contribute greatly to the high cost of goods and services in the country, renders our exports uncompetitive, and most important lead to high dissatisfaction among port clients.”

“These inefficiencies and man-made bottlenecks have direct bearing on the tax revenues collected at the ports. The inefficiencies encourage collusion among some importers, clearing agents, and Customs Officers to exploit the system to the detriment of tax revenue,” he said.

Dr. Bawumia noted that an attempt by government to deal with the issue of inefficiencies in the clearance process was the introduction of the Destination Inspection Scheme, and the single window systems.

Despite those innovations however, he said there were still bottlenecks which had made the problems associated with cargo clearance at the port a major concern to the government.

He said the issue of an ineffective customs valuation system still needed to be addressed and indicated that the coordination of port activities, systems operations and linkages were major concerns.

“Inefficiencies breed corruption and waste. This government is not hiding the pride of place that the private sector and business in general, occupies in our development agenda. We need to catalyse and facilitate the private sector to create jobs, to grow a prosperous economy.”

“It is the revenue from growth that helps to build a better economy and not the revenue from inefficient and punitive port charges. In fulfilment of our promise to be more business friendly and support the private sector for growth, government has removed and where appropriate reduced some taxes payable at the ports. It is however worth noting that if these inefficiencies persist, the benefits expected from the reduction of these taxes will not be realised,” he said.

By Yaw Kyei

 

 

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