No More Customs Barriers On Roads ...From September

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Government has directed the Customs Division of the Ghana Revenue Authority (GRA), to remove all barriers on the country’s roads effective September 1, 2017.

This forms part of a three-phase policy reform to make Ghana’s ports competitive on the continent, Vice President, Dr. Mahamudu Bawumia has announced.

“From September 1st [2017] Ghana is going 100% paperless at the ports. The first policy reform is to do with the transit corridors and the barriers that inhibit or delay or extort as far as transit trade is concerned,” Dr. Bawumia stated while addressing a conference on Port Efficiency in Accra. 

The Customs Division ensures the protection of revenue by preventing smuggling. This is done by physically patrolling the borders and other strategic points, examination of goods, and searches of premises, as well as documents relating to the goods.

Dr Bawumia charged the Customs Division to “ensure all internal Customs Barriers are eliminated in Ghana from September 1”.

The directive when implemented would see an end to physical inspection of goods at Customs Checkpoints mounted on major highways across the country.

Transit Routes

Transit goods destined for other countries enter the country through one entry point and leave the country by road or rail through another entry or exit point.

The main transit routes are Tema-Kumasi-Tamale-Paga; Tema-Kumasi-Tamale-Hamile; Aflao-Accra-Takoradi-Elubo and Takoradi-Kumasi-Tamale-Paga.

He said, the nuisance costs coupled with delays in the clearance of goods and the attendant costs such as demurrage and rent at the ports contribute greatly to the high cost of goods and services in the country, render exports uncompetitive, and lead to high dissatisfaction among port clients.

These inefficiencies and man-made bottlenecks, he said, have direct bearing on the tax revenues collected at the ports.

“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.

According to Dr. Mahamudu Bawumia, various policy initiatives of government are geared towards an export led growth.

He said, “The inefficiencies encourage collusion among some importers, clearing agents, and Customs Officers to exploit the system to the detriment of tax revenue. 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.”

According to the Vice President, despite these innovations there are still bottlenecks and there is a sense that the problems of cargo clearance at the ports remain major concerns. 

“The issue of an ineffective customs valuation system still needs to be addressed. The coordination of port activities, systems operations and linkages are all major concerns. Inefficiencies breed corruption and waste.”

“...It is in this vein that this conference is being organised, to discuss and outline real and practical ways of addressing the port efficiency issues to the benefit of businesses and for growing the economy as a whole and for job creation.”

The Vice President noted that, a more efficient seaport translates into competitiveness for shippers, importers and exporters as well as all stakeholders who make their living and contribute to the growth and development of the country through the use of the ports.

His Excellency Dr. Mahamudu Bawumia was delivering a Keynote address during the Port Efficiency Conference, held at Labadi Beach Hotel in Accra yesterday.

According to him, Ports are the main gateway used by countries to access global trade and a critical component of a country’s ease of doing business and trade facilitation and that, although Ghana's ports have seen some improvements over the years, more needs to be done.

“...We have created new berths, built new terminals, upgraded equipment and implemented several reforms to raise the efficiency of the ports, facilitate trade, and improve revenue mobilization. In spite of all these efforts, most users of our ports will agree that we are far from achieving the level of port efficiency that we all wish to see and to make Tema or Takoradi the ports of choice in the sub-region. There is still queueing for berth space. Ship   turnaround time is far higher than the average for most regions around the world.”

He also mentioned that, port infrastructures, as well as the efficiency of customs procedures are among the most important determinants of final cost of imports and exports hence, most ports around the world are creating value through efficiency and revenue increases by their position as economic and trade drivers.

He said, “According to the International Chamber of Shipping, around 90% of world trade is carried by the international shipping industry. Ports have become crucial for international trade transactions. For landlocked countries, access to ports is an essential lifeline.”

The Vice President also told the conference that, Ghana’s ports are the main source of international trade and domestic revenue mobilization, adding that, the Ghana Ports and Harbours Authority (GPHA) handles about 70% of the national and neighbouring landlocked Burkina Faso, Mali and Niger’s trade and traffic which result in the overall socioeconomic development of the country and for the sub-region.

 “...I visited the ports soon after we came into office in February this year. This conference is the result of that visit. In recent times, I have been stressing the need for timely reporting and availability of accurate and consistent data in order to monitor and evaluate our development process.  The evaluation of the efficiency of our ports is part of this need.

According to him, the efficiency of the port is achieved through various port productivity indicators including access to berths, turnaround time for vessels calling at the port, dwell time for containers, processing and clearing times for import and exports and even including and delivery to the points where they are needed.

However, he pointed out that Ghana has a long way to go and Government would have to 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 so as to push the rapid industrialisation agenda forward.

He however bemoaned the delays in the clearance of goods and the attendant costs such as demurrage and rent at the ports and stated that, in 2016 shippers (importers) paid an estimated amount of USD100 million in demurrage charges.

“This is not the kind of revenue we need or want to build this country. It is a punitive cost, an inefficiency cost. It is an avoidable cost, and it only goes to demonstrate that shippers are not releasing containers to the shipping lines in good time,” he said.

He said the Akufo-Addo led government is not hiding the pride of place that the private sector, and business in general, occupies in the development agenda and that the country needs to catalyse and facilitate the private sector to create jobs and to grow a prosperous economy.

 

“Together, we need to do whatever it takes to ensure that port efficiency is not a lip service, that we enhance revenue mobilization, and stimulate businesses growth. It is only by so doing that we would be able to create the jobs so much needed by our teeming youth,” he stated.

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