Alleged harassment, inadequate transport linkages, unattractive taxes and more impeding transit trade

Last week, the Ghana Ports and Harbours Authority and key stakeholders in the maritime trade sector successfully returned from a 5-day trade mission to Ouagadougou, the capital of Burkina Faso.

The resumption of this promotional activity post-COVID was intended to ascertain the barriers to the transit trade, explore ways to improve the transit business, and ultimately woo more cargo volumes through the ports of Ghana.

Despite Ghana’s corridor maintaining its second-place position among the available routes to the economic operators of Burkina Faso, it was disturbing to hear that the same old challenges continue to frustrate these economic operators – perhaps the hurdle preventing Ghana from taking first place.

The Acting General Manager in charge of Corporate Planning, Khalid Nuhu, and the Executive Secretary of the Joint Association of Port Transport Unions (JAPTU) – Ghana, Ibrahim Musah, shared some findings with the public from the trade mission last Sunday on the award-winning Eye on Port TV program.

They disclosed that despite renewed hope from the Ghanaians and their Burkinabe counterparts for continuous fruitful trade, transit business through Ghana’s corridor is currently far from its expected potential.

According to them, some recurring concerns persist and if left unaddressed, could threaten Ghana’s fortunes in the fiercely competitive transit trade.

Some of these include alleged harassment and extortion from uniformed personnel at multiple checkpoints, inadequate transport linkages, unattractive taxes, delayed documentation processes at border checkpoints, and disparities in weight readings at axel load stations, among others negatively impacting the cost of doing business along Ghana’s transit corridors.

According to the Head of Corporate Planning at GPHA, transit trade through Ghana, in terms of volumes has stagnated in recent years.

“We started this business around 2003. Since then we have seen gradual growth in the transit business, but since we hit the 1 million-ton mark around 2018, we stagnated and we have not crossed beyond 1.5 Million tons. Container traffic has not hit 100,000 TEUs yet. In 2021 we thought we were going to hit the 100,000 TEU mark because cargo increased through the port but still we did about 90,000 TEUs.”

He attributed this stagnation to stiff competition and Ghana’s inadequate preparation for the transit trade.

“If you look at the transit infrastructure, apart from the Port Authority that is doing well to improve infrastructure in the port to benefit the captive cargo that comes to Ghana and the transit cargo bound for the landlocked countries, the other areas have still not seen significant improvement.”

He said Ghana’s international highways are not of the highest quality required to support the trade. Again, Mr. Nuhu added that Ghana’s undeveloped railways and inland water transport infrastructure leave much to be desired.

He also revealed that “when I went to Burkina, I was told we do not have a single border post but to achieve your objectives in transit trade as a nation you will definitely have to have a single border post where it acts like a one-stop shop where all checks are done. You cannot check at Ghana’s border and cross some 20 meters away to be checked again.”

The Acting General Manager of Corporate Planning indicated that Ghana’s domicile tax system has proven unfriendly to transit customers.

He called for preferential treatment and reconsiderations to be given to transit cargoes in taxes such as VAT.

“Can we give priority to the transit business over the local cargo because this a business we are actually looking for, and they have options and they can move anyway? So if the law says for instance a vehicle that spends 60 days has to be confiscated and disposed of, should we take the same blanket law and apply it to transit?” he quizzed.

“When you look at the VAT, the domicile rule indicates that once the services is provided within the shores of Ghana, value addition should attract VAT. It is true the services are provided in Ghana but will you be able to isolate transit,” he added.

Ibrahim Musah, Executive Secretary of JAPTU-Ghana on the other hand, said transistors are unhappy with the way “laissez passer”, a customs border-crossing permit is implemented.

“Per the customs regulation this permit is supposed to be given for a period of 90days but for some reason, it is given for 30 days here, and aside from that the process is painfully slow for them, the complaint is that when you are given the 30days and you have to exit within the validity period you are still not allowed to reuse the same laissez-passer and the fact that when it expires you need to go back to the borders to have it renewed.”

He continued, “The issue of axle load came up and it looks like our axle load stations do not seem to be harmonized in the readings they give us. Sometimes the reading from the port is different from what we get on the road. Tadieso has been a major source of worry for our transistors.”

The spokesperson for truckers noted that beyond the multiplicity of borders, the demand for illicit payment by uniformed personnel continues to persist despite past and recent efforts to notify authorities.