Research justifies 'paperless' trade in Ghana’s ports

A comprehensive study on Ghanaian seas and air ports has revealed the need for the country to quicken up pace for implementation of the paperless policy to improve efficiency.

The research report produced by the Ghana National Chamber of Commerce and Industry (GNCCI) provided detailed analysis of the situation at Ghana’s three main port facilities.

Mr. Julius Bradford Lamptey, a researcher of GNCCI, presented the reports at a stakeholder workshop on Thursday.

The three main ports in the country captured in the report include Tema and Takoradi Seaports as well as the Kotoka International Airport.

Mr. Lamptey presented the reports as follows: the study was undertaken in response to the growing response to the growing concerns by the business community about the difficulty or otherwise of doing business at the ports and the use of findings for advocacy aimed at easing constraints importers and exporters face when undertaking imports or exports.

The main aspects of port operations were examined as part of the study. These are the facilities at the ports, the procedures for doing imports and exporters when using the facilities. Two main methods were employed in the analyses. 

First, we reviewed the extensive literature on international trade in Ghana with particular focus on port operations. 

The second approach involves a survey of importers and exporters from across four regions including Western, Greater Accra, Central and Eastern regions. 

The methodology also involved in port operations in Ghana and two validations workshops in Takarodi and Tema.

In the last few years Ghana has experienced growing levels of trade, imports volumes have gone by about 14 percent 2010 and 2016. Exports volumes have increased by 64 percent over the same period. 

In terms of value, both imports and exports have gone up by more than six times. Port facilities have not seen upgrade commensurate with the fast pace facilities compares favourably with port facilities in the comparator countries in the West Africa region. 

Importers and exporters largely support this view and over 70 percent of our survey respondents described Ghana’s port facilities as good, a few thought they are excellent.

However, in spite of the relatively strong infrastructure, the study also identified long container dwell times at the two main seaports. 

Takoradi has container dwell time of 25 days with Tema having 20 days and these compare unfavourably with container dwell time of four days in Durban, 11 days in Mombasa, 14 days in Dar El salaam and 18 days in Lomé.

The relatively long dwell time in Ghana is as a result of several factors and these includes the long and complicated procedures, which have been mounted by the authorities to check abuses by stakeholders in the import and export trade. 

For example, importers are supposed to go through over 20 different procedures before getting their containers out of the ports.

Other factors include the activities of shippers and importers/exporters who tend to use the port area as cheap source of warehousing.

These are also importers who deliberately delay clearance of containers either because they lack the finances to pay the custom duties and other required fees and charges or actively seeking to have their charges reduced by corrupt customs officials.

Also, the standard dwell time offered by Ghana Ports Harbours Authority (GPHA) is unrealistic from the point of view of importers and exporters. 

The standard dwell time for which containers can remain in the port without the payment of demurrages is seven days and it includes weekends and public holidays; days for which all port officials are absent from official duties. 

But too many of the port users have little knowledge about port procedures, which contribute to container dwell time. The long dwell time has cost implications for importers and exporters and other users of port facilities in Ghana and more than half of the businesses surveyed were of the view that the cost of doing business at the country’s ports ‘’too high’’. 

The other institutions involved in the imports and export business corroborate their assessment. The Ghana Institute of Freight Forwarders (GIFF) described the cost of doing business at Ghana’s ports ‘’too high and unbearable’’. 

For John Biter, a free zone engaged in the export of wood products, ‘’one of the major challenges facing it [company] is the payment of the port rent charges to GPHA.

The high charges are also attributed to the multiplicity of institutions involved in the import and export trade, as well as the centrality of the agency system in port operations. 

The import and export business at the port boasts of about 16 different institutions of state. In the words of GIFF, ‘’involvement of many agencies does not make the system efficient and effective’’. 

It said, “These agencies caused a lot of delays, particularly on import leading to the payment of demurrage and excess rent’’. Some of these state institutions use the import and export as source of internally generated funds [IGF] to fund their statutory operations and increases the cost for business. The use of agents as required by the customs Act [Act 891, 2015] appears to complicate the system and raises costs. 

Given that many importers and exporters are not knowledgeable about the procedures at the ports, there is information gap between the importers and exporters on one hand and the agents on the hand. 

The view is that the agents tend to exploit the information gap to their advantage and increase costs for importers and exporters.

Going forward, we recommend a number of measures to address the concerns of importers and exporters and make the ports in Ghana efficient.

First, while acknowledging the on-going port expansion programmes, we recommend that given the growing levels of international trade, port expansion programmes should be undertaken by government on a continuous basis. The expansion works must consider both equipment and the physical space within the ports and the adjoining communities.

Second, there is a need for streamlining and simplification of procedures at the ports which require automation. This should be done by taking on board the concerns of stakeholders for an effective implementation.

Third, a review of the institutions at the ports must be undertaken with a view to eliminating some of them and avoiding costly duplications. The supporting agencies should not be allowed to use importers and exporters as cash cows for internally generated funds.

The GNCCI also called for urgent review of the agency system saying the one way out is extensive education programme to bridge the information gap between agents and all other users of the ports in Ghana.