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Business

USAID study examines cost of trading in Ghana and impact on TFA

Starrfm.com.gh By Starrfm.com.gh Published June 30, 2017
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Importers in Ghana pay an average of 6.5 percent of the value of their goods in fees at the various ports in the country.

This, is according to a survey, conducted by the USAID on the cost of Trading in Ghana. The report, for instance, found that an amount of 8,244 cedis is paid on the import of perishable goods valued at 69,000 at the Tema port.

A small part of this amount goes to Metropolitan and District Assemblies as unofficial charges, while the rest is shared between the GRA and private entities for the clearance of goods.

Speaking at the launch of the report in Accra recently, the American Ambassador to Ghana, Robert Jackson said, most of these fees and taxes are unnecessary and must be removed if the country is to fully benefit from the Trade Facilitation Agreement which it has signed onto.

“I’m saying the fees and charges are more of a nuisance. What we have seen in other parts of the world… Look at the European market as an example and the North American Free Trade Zone as an example; if you get rid of these fees, you actually see an increase in trade because people are more willing to source goods from outside where they are able to compete well”, Mr. Jackson said.

Per the Trade Facilitation Agreement of the World Trade Organization, Ghana is obliged to ensure that the fees and charges it levies on trade are approximately equal to the cost of services provided.

The agreement also prohibits the country from imposing these fees and charges for the purpose of revenue generation or from using them as protection for domestic goods. The data which was developed for Ghana’s National Trade Facilitation Committee (NTFC) with assistance from USAID, saw for instance that, a large trader paid GHC 7,139 in official and unofficial fees. Such a trader also paid GHC 30,734 in duties and VAT, to import perishable goods valued at GHC 69,250 to Tema. A smaller trader paid GHC 11,486 in fees to import rice valued at 67,750, also at Tema.

In addition to these fees, the survey also found that traders had to give samples of their goods (perishable) to authorities like Narcotics Control Board and the Plants and Regulatory Services Directorate.

On the import side, 29% of the unofficial payments occurred during physical inspection and 67% on the export side. The data also exposed a lack of consolidated list of trade-related fees and charges. Even if it exists, the indicated it is not easily accessible.

Meanwhile, the Director of Revenue Policy Division at the Finance Ministry, Anthony Dzadzra said, government is prepared to review import levies on some materials used in production. “It will be on selected raw materials which AGI would tell us… They are the manufacturers. The aim is to reduce the import duties while you implement efficiently, your domestic taxes”, he stated.

Ghana, last year became the 95th country to ratify the Trade Facilitation Agreement, having been a member of the World trade Organization since 1995. It is estimated that implementation of the agreement would reduce worldwide trade costs by 17.5%, with developing countries like Ghana being the biggest beneficiaries.

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