Executive Secretary of the Importers and Exporters Association, Ghana (IEAG), Samson Awingobit, has disclosed that the drop in traffic of imports into the country is as a result of inflation, among others.
According to him, the decline at the port, as revealed by the Ghana Ports and Habour Authority (GPHA) in a meeting with key stakeholders in the country, does not bode well for the country. He indicated that figures churned out by the GPHA is indicative of the volume of goods being imported into the country.
Mr Awingobit stated that at the meeting, members were made to understand that in 2021, GPHA recorded some 1.51 million metric tonnes of cargo which in 2022, dropped to1.2 million metric tonnes. He noted that other factors such as government’s reversal of the benchmark value at the ports has equally had such negative impact on importers, making it difficult for them to import any goods.
“Largely, the influential factor that makes total drop of cargo at the port is as a result of inflation, exchange rate last year and the total reversal of the benchmark values that the government reversed. Remember the government took away 20% and promised that they were going to set up an adhoc committee to deal with the issue… But before we could say jack, in October/November last year, they said they’re reversing it without any recourse to consultation… So, that has caused fear and panic and that has made our port become very expensive coupled with the shipping lines local charges as well.”
Samson Awingobit
Impact of drop in port traffic on government
Furthermore, Mr Awingobit stated that around July last year, the depreciation of the cedi depreciated affected people who had to pay their suppliers in the dollar equivalent. This, he explained, made it difficult for importers to engage in any real trade, especially coupled with duties shooting up, causing more fears.
“What’s happening is that there’re goods in the market but we cannot ascertain as to where the goods are coming from. From where I sit, we told the port that the cargo has moved to Togo and Ivory Coast, they also said when they crosschecked with Togo port, they realized there’s no increase in cargo. What we saw was that many people have gone there to put up warehouses – so they clear the cargo there and store it in their warehouses…”
Samson Awingobit
The executive secretary of the IEAG emphasized that government will not get the needed taxes at the port and can only rake in income taxes. He revealed that when that happens, it will affect the final analysis of government’s revenue.
“After the benchmark reversal, there was this 2.5% VAT which was passed in the 2023 budget; it has been implemented in Jnauary, so that too has brought t he cost of doing business at our port. So, whiles there’s a drop in cargo, there’s no way government will make the needed revenue.
Samson Awingobit
Furthermore, Mr Awingobit expressed that the situation will equally affect GPHA’s internal revenue and other obligations it may have in paying off debtors, staff and also expenses in maintaining their equipment and buying same to boost operations at the port.
“… So, if more vessels are not coming to the port and cargo is not coming, that means it’s going to affect them. The other aspect is that it’s going to affect revenue as a country, because before GRA comes out with their target for the year – the GRA is made up of two division, the domestic division and the customs division. The customs division is in charge of duties and taxes [on] international trade and the domestic is in charge of salary, income tax and corporate tax. So, what it means is that most of the time they don’t get much from the domestic, much comes from the import. So, anytime Tema Harbor’s revenue drops then clearly, GRA will not meet its own target.”
Samson Awingobit
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