Maritime trade predicted to slow

Ghana’s maritime trade outlook for 2016 is likely to see a decline in trade volume and a slowdown in both imports of major commodities and exports of semi-processed goods to the Chinese and European market, Abdul Haki Bashiru-Dine, a Research Officer at the Ghana Shippers Authority has projected.

 

The major factors, he said, will be attributed largely to the worsening economic environment, the energy crisis and its effect on manufacturing sector, negative growth in agricultural output, the uncertainties surrounding election years, and the attitudes of business people.

“Ghana is expected to record a further decline of its international trade volumes in 2016 of about 10% compared to 2015. The slowdown in the Chinese manufacturing sector and the exchange rate volatility of the cedi against major trading currencies like the US dollar will significantly affect Ghana’s international maritime trade,” Bashiru-Dine said.

Latest figures from the Ghana Shippers Authority obtained by the B&FT show that the country’s maritime trade at its two seaports of Tema and Takoradi recorded a decline of 14.3% to 13.0 million tonnes between January-December 2015, as compared to the 15.1 million tonnes recorded during same period in 2014. 

Total import trade for the period recorded a decline of 12.8% -- to a figure of 9.4 million tonnes compared to 10.8 million tonnes in 2014.

Total export trade in the review period was 3.5 million tonnes for 2015,  a decline of 18% compared with the 4.3 million tonnes recorded in 2014.  The port of Tema recorded a decline in imports and exports trade of 12.4%  and 34.7% respectively.

The port of Takoradi recorded declines in its import and export trade of 16.7 % and 6.2 % respectively. 

Total trade for Tema Port was 9.6 million tonnes of import/export, and Takoradi Port recorded 2.4 million tonnes and 989,913 tonnes in exports and imports trade for 2015 respectively. 

The data show that transit trade recorded an increase of 1.4%  in 2015 compared to 2014 for the same period, representing a significant increase over the past five years’ transit trade figures from 2009-2014 volumes which have been on the decline.

“It is quite refreshing that efforts by stakeholders in improving and attracting transit cargo to our ports are paying dividends.’

“The transit trade is on an upward journey, as noted in the January to September 2015 review where it recorded quite a high increase of over 20 percent. Based on this, it is expected that the transit trade will record a high volume at the end of 2015.” 

The majority of maritime imports for the period January to September 2015 came from the Far East, Africa and the North Europe (Scandinavia) and Mediterranean Europe ranges. 

Each of these ranges recorded tonnages as follows:  Far East recorded 3.3 million tonnes representing 38%; North Europe had 1.6 million representing 19 tonnes; while Africa recorded 1.4 million tonnes representing 16%; and Mediterranean Europe had 1.2 million tonnes or 14%.   

Maritime imports from North America and the other ranges recorded 486,988 tonnes and 563,894 tonnes, amounting 6% of total import trade for the review period. The UK range recorded 89,561 tonnes, amounting to only 1% of total maritime imports for the period.

Total import laden containers for the review period amounted to  211,201 -- equivalent to 301,148 Twenty-Foot Equivalent Units (TEUs).  Compared to performance in the same period of 2014, the laden container import trade recorded an increase of over 9% in the total number of containers -- indicating over 8% in TEU.

Export trade

The total export trade for the review period amounted to about over 4.3 million tonnes. This was made up of over one million tonnes of liner items, 337,102 tonnes of break bulk items, and over 1.9 million tonnes of dry bulk items. The remaining 13,921 tonnes was recorded for liquid bulk items. 

Compared to the previous year’s total tonnage, the review year recorded a decline of 6 percent in export trade. 

The liner trade recorded a decrease of over 11%, the break bulk trade a deccrease of 8 percent, and the liquid bulk trade a decrease of nearly 48%. The dry bulk however showed a slight increase of over 1%. 

Liner export trade for the review period was over 15 percent less than was recorded for the same period in 2014. It was made up of cocoa beans recording 253,552 tonnes; cocoa products had 168,488 tonnes; and sawn timber/lumber was 46,245 tonnes. 

Non-traditional exports including cashew-nuts was 162,770 tonnes; shea-nut/shea-nut butter had 31,952 tonnes; banana recorded 31,277 tonnes; and scrap-metal was 31,543 tonnes.

The break bulk export trade for the review period fell by 8 percent. The major export commodities in this trade category are bagged cocoa beans and timber logs. 

A slight increase of over 1% was recorded for the dry bulk export trade during the review period. Commodities in this trade including manganese was 979,936 tonnes; bauxite was 849,273 tonnes, bulk cocoa beans had 57,044 tonnes, and bulk shea-nuts was 68,202 tonnes.

On the liquid bulk export trade, the total liquid bulk exports for the review period decreased by over 47%, with major items in this trade being petroleum products.

Direction of the maritime export trade: The 3.3 million tonnes of maritime exports recorded for the review period was shipped to various destinations in the world.  The majority of items exported went to the Far East and the North Europe ranges. 

The Far East range received a total of 1.6 million tonnes, 49% of total export, while the North Europe range had a tonnage of over 510,000 tonnes or 15% of total export.

China wants deepened bilateral cooperation

The Chinese Ambassador to Ghana, Sun Baohong, has said China wants a more deepened bilateral cooperation with Ghana in 2016.

 

“This year, we hope that we can all double our efforts and intensify cooperation with Ghana to carry out more win-win cooperation for the benefit of both countries,” she said.

She added that there will be fruitful interactions with Ghanaian businesses and the government on how to promote cooperation in various sectors; especially in production capacity, industrialisation, agriculture, modernisation and infrastructure.

Speaking at an event to celebrate the new year with Chinese people in Ghana, Ms. Baohong stated that the main task in 2016 is to see implementation of the consensus reached between Presidents John Dramani Mahama and Xi Jinping on the side-lines of the Forum on China-Africa Cooperation, which came off in Johannesburg last year, to deepen cooperation between the two countries.

The ceremony saw almost a thousand Chinese citizens gather to mark the new-year. The event, organised by the China Enterprises Chamber of Commerce in Ghana, came off at the Kempinski Hotel and was interspersed with traditional Chinese music, dance and poetry.   

“I wish all the Chinese in Ghana a happy new year, and I think over the past year they have made great efforts in promoting the bilateral cooperation between China and Ghana. We have seen the achievements registered and we are very proud of their achievements,” she added.

The ambassador noted that in 2014, China-Ghana trade volume hit US$5.6billion and reached US$3billion in the first half of 2015, with Ghana’s export to China rising by 21 percent. 

On development projects, she added that the Kpong Water Supply Expansion Project, an important livelihood project financed and contracted by China, was put into operation last year. Also, the China-aided University of Health and Allied Sciences in Ho and the Cape Coast Sports Stadium were opened.

She added that the sound relations between the countries lie in the amity between their people. “The friendship between our people is the motive power that propels the continuous and sustained development of China-Ghana friendly cooperation.”

The Chinese Enterprises Chamber of Commerce in Ghana (CECCG), a joint and non-profitable organisation of Chinese companies in Ghana, was founded in February 2007 under the auspices of the Economic and Counsellor’s Office of the Embassy of China in Ghana.

The chamber’s mission is to promote the communication and cooperation of Chinese enterprises in Ghana, to broaden the understanding and interaction of Chinese enterprises with Ghanaian industrial fields, to represent the members of the organisation and to protect the legal rights of Chinese enterprises, to guide and coordinate the legal operations and ensure fair and healthy competition among members.

The chamber is aimed at reinforcing the healthy and rapid development of the China-Ghana economic relationship, to perform as a tight bond in the economic communication between China and Ghana in the industrial world.Source:B&FT

Ratify trade facilitation agreement to boost export revenue

The Coalition for Trade Facilitation, a business-led initiative, says speedy ratification and implementation of the Trade Facilitation Agreement (TFA) could raise the country’s export revenue.

 

Despite the huge attention given to cost of ports and border controls over the last 10 to 15 years, goods continue to be delayed at the ports and borders for days or even weeks -- slowing trade flows and adding costs to business that are often passed on to consumers. One of the main outcomes of the World Trade Organisation’s 9^th Ministerial Conference in Bali, Indonesia, in December 2013 has been an agreement on trade facilitation. 

Speaking at the first meeting in Accra, Secretary-General of the new alliance under the International Chamber of Commerce (ICC Ghana), Mr. Emmanuel Doni-Kwame explained that ratification and implementation of the trade facilitation agreement is important to business, because it can have a major impact on bringing down trade transaction costs and raising the country’s export revenues. 

Total export revenues for the three major commodities -- cocoa, oil and gold -- amounted to US$8.2billion for the period between January and September 2014. This reduced by US$2.4billion to US$5.8billion for the same period in 2015, and it is expected to fall further this year.

Mr. Doni-Kwame confirmed that a trade facilitation agreement is important because it can have the major impact on bringing down trade transaction costs. It essentially concerns the cost of clearing goods for import and export. 

“The need for change is vital in this era of globalisation, wherein there is a need to be constantly updated on new developments within the existing multilateral arrangements which have an impact on the country’s economic development.

“Trade facilitation agreement will enhance an efficient logistics chain, impact the manufacturing and agro-based industries which create real jobs, impact trading relationships; and impact our mining, oil and gas businesses, and livelihoods.

“Our efforts at trade facilitation must be geared toward attainment of the blue economy; it must be underpinned by an economic paradigm-shift that is geared toward generating more revenue, creating jobs, and being competitive in the global market,” he said.

He further explained that goods delayed at the country’s borders for days, or even weeks, slow trade flows and add costs to business that are often passed on to consumers; adding that it is widely recognised that private-sector engagement will be critical for successful implementation of the TFA. 

The alliance is the first initiative to provide a national platform that brings business closer to the process of enacting reforms under the agreement.

The Alliance will collaborate with all stakeholders, Ministry of Trade & Industry and the Parliament of Ghana to ratify the TFA and also provide inputs into the development of a roadmap for its implementation.

He said: “The Alliance will support government to drive reforms aimed at positioning Ghana to capitalise more widely on international trade and investment opportunities, since the private sector can play a vital role in helping to shape policy and other improvements so that they have the greatest national impact”.

He explained that ICC Ghana strongly supports ratification and implementation of the TFA, and is encouraged that 63 countries have now ratified the agreement -- which is expected to reduce worldwide trade costs by some 17 percent. 

“The Alliance for Trade Facilitation with support from the Business Sector Advocacy Fund (BUSAC) has provided a unique platform to leverage business, and also to research into the current business processes in our domestic and international trade and lead reforms. 

“It is important that business and the general trading public understands what the agreement provides for and how the implementation process can be influenced, hence the coming together with initial support from BUSAC.” 

The Coalition includes the World Trade Centre Accra, Association of Ghana Industries, Ghana Employers Association, Ghana Institute of Freight Forwarders, Ghana Shippers Authority, Federation of Association of Ghanaian Exporters, Ghana Union of Traders Association and the Ghana National Cargo Transporters Association amongst others, with support from the Business Sector Advocacy Fund (BUSAC).

Research suggests that improved border and Customs measures could trigger a 60-80% increase in cross-border SME sales in most economies.

The removal of these barriers to trade as captured in the agreement is expected to reduce total trade costs by 10%. Also, the requirement to implement the Agreement is directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support will be provided to help developing countries achieve that capacity.

Trade transaction costs are highest in developing countries, which are the least able to carry this additional burden.

These costs affect small and medium-sized enterprises (SMEs) disproportionately. They often lack the means and capacity to comply with complex rules and high cost of compliance with Customs and border procedures; and other non-tariff measures represent significant charges in relation to their smaller volumes of trade. This makes them uncompetitive as suppliers and hampers their integration into regional and global value chains.

The trade facilitation agreement, which will be binding on all 159 member-states at the level of all border agencies and not just Customs authorities, is a classic “win-win” outcome.

The Chief Executive Officer of the Ghana Shippers Authority, Dr. Kofi Mbiah, in a recent media interaction called for the simplification, harmonisation, standardisation and modification of procedures in the trade, transport and logistics industry.

“Our time for trade facilitation is now; therefore, players in the industry need to adopt effective policies and put in place the necessary schemes, structures and systems that build confidence and predictability in the business community.

“Players must also strive for creditability and transparency in their decision-making processes, and by doing so they can experience the growth they crave,” he said.