On January 4, 2017, Ghana became the 104th member of the World Trade Organisation (WTO) to ratify the Trade Facilitation Agreement (TFA), crafted among other things to create the required climate and structures for customs compliance among nations and other state agencies for easy clearance, release and movement of goods. The TFA, according to the WTO, will also help deepen transparency, reduce corruption and other bottlenecks that hinder a cost effective global trade regime with its attendant benefits.
This agreement comes at the back of several trade protocols among ECOWAS member countries to promote inter-regional trade with a common market. The Common External Tariff (CET) implemented in 2015 by the ECOWAS Trade Liberalisation Scheme (ETLS) is one of such measures expected to boost the manufacturing base of the sub-region.
The sub-regional body also recognises the need for an effective transit trade among member countries. To ensure that this process is facilitated effectively, the ECOWAS Inter-State Road Transit (ISRT) scheme was established to bring to an end the payment of duties and other charges on goods in transit, reduce checkpoints along major corridors, and create a regional insurance scheme for vehicles among others.
Borderless Alliance, a private sector-led regional advocacy group that promotes regional economic integration and the free movement of goods and people in West Africa by tackling barriers to trade and transport in the region, in a fact-finding trip in August, 2015, counted fifty-four checkpoints along the Tema-Paga road corridor. The project, jointly done with officers from the Ghana Shippers’ Authority (GSA) and Ghana Ports and Harbours Authority (GPHA), revealed that illegal fees were extorted from drivers and traders, and undue delays caused at the stops resulted in the increased cost of doing business.
At a stakeholders forum a fortnight ago in Accra on the theme, “Opportunities and Challenges of Unlocking the ECOWAS Market,” the Chief Executive Officer of the Ghana Shippers’ Authority (GSA), Ms. Benonita Bismarck highlighted the challenge, but indicated that a recent survey brings the police and customs checkpoints along the Tema-Paga corridor to about forty. She disclosed that traders and drivers spend a minimum of twenty minutes and four hundred cedis per trip as a result. The aggregation of these effects on trade facilitation between Burkina Faso and Ghana and other landlocked countries is not encouraging.
The Shippers’ Authority has recently held talks with the Inspector General of Police, Mr. David Asante-Apeatu on the situation, and has received assurance from the police service that it is determined to address the challenge. It is however interesting to note that two years ago (2015), the Ghana Police Service gave a directive to its officers along the corridors not to check trucks in transit.
The GSA and Borderless Alliance have over the past years collaborated to advocate and engage key stakeholders on the need to provide a traffic free transit regime and other issues affecting shippers in doing business at the ports and border units. The Authority has established shipper complaint and support units at Elubo, Aflao and Paga borders to give shippers a real time interface to lodge complaints or seek information to enhance their trading activities.
In 2016, Ghana recorded 900,763mt as total volume of transit/transshipment trade translating into 861,299mt of imports and 39,464mt of exports. Figures from the GSA revealed an impressive growth of 82 per cent in transit trade in the first quarter of 2016, which saw a huge decline to 16.8 per cent at the end of last year. The second, third and fourth quarters of the 2016 figures also continued with the decline of 4.5 ,4.32 and 42.1 per cents respectively over the 2015 figures. The three landlocked countries of Burkina Faso, Niger and Mali alone recorded 801,336mt transit volume in 2016, which represented 88.9 per cent of the total transit/transshipment trade along Ghana’s transit corridor.
Another thorny issue that is of concern to the shipper community, especially those engaged in transit businesses, is the imposition of a US$200 transit fee on goods in transit through Ghana’s borders. Surprisingly, this fee is not applicable in neighbouring countries competing with Ghana over the same goods in transit. Additionally, the check points in these countries are very few. In effect, these practices are denying the country’s transit corridor to become the most attractive destination with its attendant benefits locally and the sub-region in general.
While inter-regional trade among European, Asia and South American countries stands at 71, 53 and 48 per cent respectively, member states of ECOWAS are doing poorly: between 10 to 12 per cent. Countries in the sub-region have not effectively collaborated with and have confidence in each other, many custom barriers and other factors have conspired to make regional protocols on trade and regional integration less relevant due to none or partial compliance.
If Ghana wants to move from the 108th position per the World Bank Ease of Doing Business Index 2017 to a more business friendly environment ranking, the many police and custom checkpoints across the country must be significantly reduced or done away with. The US$200 charge on goods in transit must also be abolished because it does not conform to the Inter-State Road Transit (ISRT) scheme, which among other reasons was established to promote regional integration.
With the commitment of the GSA and other stakeholders to promoting the interests of the Ghanaian shipper and making the country’s transit regime a force of attraction in the sub-region, trade facilitation can only get better. However, it must take the political will of the government of Ghana and its regional neighbours to take bold steps by removing all tariff and non-tariff barriers with its concomitant effects of increasing costs and delays hindering inter-regional trade and integration.
It is on this score that one must commend Vice President, Mahamudu Bawumia for his directive for the removal of all customs barriers along Ghana’s transit corridor, conduct of mandatory joint inspection of goods by state institutions at the ports and the country going paperless in the clearance and release of goods at the ports by September 1. It is the expectation of the Ghanaian shipper and other stakeholders in the maritime and trade industry that these directives would be materialised and not remain another political rhetoric.
The former United Nations Secretary General, Mr. Kofi Annan puts it better when he said, “We have the means and the capacity to deal with our problems, if only we can find the political will.”
Leaders must find the political will to make drastic reforms for the betterment of society.
Source: Romeo Adzah || Businessweek