Full text: Dr. Bawumia’s Keynote address at the Port Efficiency Conference

Keynote address delivered by His Excellency, Dr Mahamudu Bawumia, Vice President of the Republic of Ghana on the occasion of the Port Efficiency Conference, held at Labadi Beach Hotel, Accra on May 17, 2017

Mr Chairman,

Honourable Ministers of State,

Honourable Members of Parliament,

Chief Executives and Heads of Trade and Transport Sector Agencies,

Stakeholders,

Friend from the Media,

Distinguished Invited Guests,

Ladies and Gentlemen.

1. It is a privilege and an honour to be with you this morning to deliberate on one of the key drivers for the economic development of our country. 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.

2. Indeed, port infrastructure, as well as the efficiency of customs procedures are among the most important determinants of final cost of imports and exports. More and more, ports around the world are creating value through efficiency and revenue increases by their position as economic and trade drivers.

3. The importance of ports are well noted. 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.

4. In Ghana, the ports are the main source of international trade and domestic revenue mobilization. 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.

5. The importance of our ports to the overall socioeconomic development of our country and for the sub-region thus can not be over emphasised. It is for all these reasons that I visited the ports soon after we came into office in February this year. This conference is the result of that visit and I’m pleased to deliver the keynote address for this very important conference.

6. 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. The efforts of the government to put in place appropriate policies and structures for gathering and validating data to ensure its credibility is part of our effort to building an efficient port. A more efficient seaport translates into competitiveness for shippers (importers and exporters) and all stakeholders who make their living and contribute to building this country through the ports.

7. The efficiency of the port is reckoned through various port productivity indicators. I have no doubt that you would delve into these indicators. These include

a. access to berths,

b. turnaround time for vessels calling at the port,

c. dwell time for containers,

d. processing and clearing times for import and exports and even including

e. delivery to the points where they are needed.

How do we fare on these indicators?

8. Ghana's ports have seen some improvements over the years. 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.

9. 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.

10. In a 2013 study conducted by renowned researchers Brian Slack and Claude Comtois on "Ships Time in Port, an International Comparison", The average time in port for vessels in

a. Europe is about 25 hours,

b. East & North Asia is about 17 hours,

c. South Africa is 64 hours, and I am told

d. the Port of Tema did about 103 hours in 2016.

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 this is in consonance with our rapid industrialisation agenda.

11. 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 USD100 million in demurrage charges. I am told that the last time a similar estimate was conducted in 2013, the demurrage amount was about USD75 million.

12. 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. There are other inefficiency and nuisance costs, including those used in "facilitating" clearance through the Regulatory agencies and GRA Customs 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.

13. 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. 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 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.

14. 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.

15. 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.

16. Various policy initiatives of our government are geared towards an export led growth. To this end, we have put in place measures such as the Planting for Food and Jobs, mass cocoa spraying, reduction of cost of inputs to cocoa farmers etc. Our One District One Factory aims to decentralize our industrial growth and to boost exports. An efficient port will undoubtedly play a very important role in this pursuit.

17. 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.

18. Hon Ministers, Ladies and Gentlemen, as you deliberate fervently on these matters, I will encourage you to focus on the issues of commercial invoices for imports and how to develop a system that will address that challenge once and for all.

19. Let us also be mindful that just throwing money and equipment at challenges is not always the best approach to problem solving. We need an understanding of processes, how to get systems to work together, and just as important how we manage the human factors that make things happen or not happen.

20. We need to be sure of the actual problems we are addressing with the recommendations we make. Let us also be wary of over-protecting our turfs. We need a collective effort to deal with these serious issues that confront us as a nation. I’m confident that this conference would come out with a blueprint spelling out the actions and modalities necessary for ensuring that our ports become efficient and competitive.

21. On this note Ladies and Gentlemen, I have singular honour to declare this conference duly opened. I thank you all for coming and I wish you fruitful deliberations.

22. God bless you all.