Recent data from Ghana’s port authority shows a notable decline in port traffic, with no signs of improvement. Container traffic experienced a significant drop of 20.34% in 2022, reaching 1.24m 20ft equivalent units (TEUs), in contrast to the 1.56m TEUs recorded in 2021.

The continuous drop in container traffic isn’t surprising, says Joseph Obeng, the President of the Ghana Union of Traders Associations (GUTA). “This is bound to happen because of the excessive taxation and high duty rates at the ports,” he tells The Africa Report. 

The Port of Tema, the largest in the West African country, handled the majority of the traffic, accounting for 1.21m TEUs while the Port of Takoradi processed a smaller volume of 38,699 TEUs. 

The drop in container traffic brought the total volume to below the pre-Covid-19 levels, which was 1.29m TEUs in 2020.? The actual quantity of goods transported within these containers also experienced a decline from 30m to 27m tonnes during the review period. 

This comprised 6.36m tonnes of exports and 17.40m tonnes of imports, with transits and trans-shipments accounting for 1.66m tonnes and 1.62m tonnes, respectively. Vessel calls at the ports also decreased from 2,902 vessels in 2021 to 2,600 vessels last year.  

“If the cost of doing business at the ports is affordable, the compliance level will voluntarily be very high to be able to help the country to rake in more revenue to support national development,” says Obeng.

“But, the unfavourable nature of events at the ports means that we can’t enhance our revenue collection as a nation.? All the resources that should have come to the economy are going outside as shippers or importers turn their focus to neighbouring ports and as a result, our limited forex exchange is being taken to clear goods in these neighbouring ports.”  

Togo and Côte d’Ivoire, near neighbours whose ports are more affordable, are likely to benefit from the Ghana ports exodus.

High taxes? 

Ghana’s Parliament last year passed several financial bills, including the Excise Duty Amendment Bill 2022, the Growth and Sustainability Levy Bill 2022, the Ghana Revenue Authority Bill 2022 and the Income Tax Amendment Bill 2022. 

These were part of the government’s effort to increase domestic revenue mobilisation to generate approximately ¢4bn annually.?The measures were also instrumental in supporting the government’s objective of obtaining board approval for the $3bn International Monetary Fund (IMF) Programme staff-level agreement. 

The government also scrapped the benchmark value policy on import duties at the country’s ports in its entirety.?As a result, the valuation of all goods would continue to be determined in line with the World Trade Organization (WTO) valuation agreement, World Customs Organisation’s customs valuation compendium and Ghana’s Customs Act 2015 (Act 891) Section 60 on used motor vehicles and Section 67 relating to general goods.  

The government initially decreased the benchmark values for general goods, lowering them from 50% to 30%. Additionally, import discounts on vehicles were also reduced from 30% to 10%.?The benchmark value discount policy was introduced in 2019, aligning with the World Customs Organisation’s guidelines for regularly reviewing the valuation database.?  

The decrease in port traffic can be attributed directly to the taxes levied on imports in recent times, says the Executive Secretary of the Importers and Exporters Association of Ghana, Samson Awingobit Asaki. “I can tell you that the fiscal policies introduced by the government have rendered our ports empty. There’s a total reduction of imports into the country,” he tells The Africa Report.?

“We have all the infrastructure but the taxes and the benchmark value that was abolished completely shot up import duties leading to Ghanaian importers preferring to conduct their trade in neighbouring ports.”  

Striking a balance

The desertion of the Ghanaian ports for neighbouring ones is a “crisis that needed an inclusive approach from all stakeholders”, says Albert Fiatu, the Executive Director of Centre for International Maritime Affairs Ghana (CIMAG). 

“So, the solution to addressing these challenges is for government to reconsider its decision of increasing taxes and broadening the tax net to rake in the needed revenues for national development,” he tells?The Africa Report. Concerned by the situation, the Ghana Ports and Harbours Authority (GPHA) has taken proactive steps to tackle the issue and reverse the declining trend promptly.?

“To address the matter, the GPHA initiated a crucial meeting with key stakeholders, which included the Ghana Union of Traders Association (GUTA), Importers and Exporters Association of Ghana (IEAG), Ghana National Chamber of Commerce and Industry (GNCCI), the Association of Ghana Industries (AGI), the Ghana Institute of Freight Forwarders (GIFF), and the Association of Customs House Agents Ghana (ACHAG),” an official of the Ghana Shippers Authority said on condition of anonymity.

“The participants are collaborating to identify the root causes behind the decline in port traffic and to devise effective solutions to rectify the situation.”  

Fiatu says a national dialogue involving the country’s ministry of finance and various stakeholders in the maritime industry should be promptly scheduled to address the issue. “Ghana represents a lot of the landlocked countries in the sub-region.?They do a lot of business here in Ghana and because of the high cost of doing business here, we are losing revenues that hitherto we generated from these countries to our neighbouring countries,” he says. 

“Striking a balance between revenue generation and supporting businesses growth is, therefore, crucial.”