IMANI Report: The Advanced Shipping Information (ASHI) Will Help Ghana But..
Advanced Shipping Information (ASHI) is a system that will allow relevant shipment information to be captured at the port of origin, and that data received in Ghana far in advance of vessel/cargo arrival in Ghana. The system will impact directly, the activities of shippers, importers, shipping agents and all stakeholders that interface with shippers/shipping agents at the ports in Ghana.
ASHI's launch has been delayed mainly, due to resistance from some groups of stakeholders who argue that the extra cost to be borne by the shippers/shipping agents will create undue economic strain on a system already burdened with numerous charges, levies, fees, and taxes. Secondly, the opponents of ASHI believe that ASHI largely duplicates systems that are already in place. Thirdly, they believe ASHI fails to tackle the main causes of congestion at the ports.
The primary advantage purported for ASHI is the reduction in delays at the ports. However, delays at the ports are caused by several factors. Most of these factors are peculiar to different stakeholder groups. For instance, from the perspective of the Ghana Union of Trade Associations, GUTA, one of the major causes of delays at the ports is the process of accessing funds from credit institutions for clearing the goods. It does appear that sourcing funds for clearance of imported goods is solely the responsibility of the importer and has absolutely nothing to do with advanced information about the goods to be imported and cleared. Again, while ASHI may not directly solve this issue, it will make all the necessary authentic documents available for these processes to begin. Thus, it has the ability to positively impact the clearing process.
Another major cause of the delays is as a result of the bureaucracy surrounding the destination inspection of cargo. With ASHI, the necessary information for risk analysis and determination of destination protocols can be received in advance. With ample time to review documents, the need for opening containers at the ports, which currently happens for about 90% of cargo, will also be reduced.. This will also minimize the practice of looping the cargo from port to off docking area and back to the ports. ASHI has potential to streamline the process, expediting the time for clearing goods and reducing charges as a result of the bureaucracy/inefficiencies.
The delays at the ports also lead to congestion. By reducing delays, ASHI also indirectly, tackles the issue of congestion. ASHI is not an independent technology or system because it is integrated into the Ghana Integrated Cargo Clearing System- GCnet system and will not add to the already large number of service providers. It merely complements what is already in existence. Unlike the GCnet as it is now, where cargo information is available 72 hours prior to vessel arrival, the ASHI integration will allow the information to be available when the cargo departs the origin of country. This renders altering any information, and the practice of over/under invoicing practically impossible.
Admittedly, the issue of congestion at the ports requires a more thorough institutional reform; a process of which ASHI is a first step. The sheer volume and numbers of agencies at the ports need to be pruned and consolidated to minimize the bureaucracy. A typical example of the bureaucracy is the case of the Ghana Standards Authority and the Food and Drugs Authority, both of whom perform functions which can pass as duplications of each other. Thereby a consolidation of their roles will ease bureaucracy and will minimize the charges borne by the shipper/agent. These actions ought to be taken up by the coordinating Ministries of Trade, Transport and Finance.
If successfully implemented, ASHI will reduce demurrage and rent charges for the shipper/agent. The Ghana Shipping Authority, who are championing ASHI, have projected that the total cost savings that could accrue to users annually as a result of reduction of demurrage and rent charges are conservatively estimated at USD 75million and GHS 30 million respectively.
Aside the monetary gains, ASHI will facilitate a reduction in the productive time spent at the ports, of which Ghana presently does not perform too well, in comparison to at least five other countries in the sub-Saharan region. Dwell time of cargo at Tema is generally high at Twenty (20) days. Other ports and corresponding dwell times are Durban (4days), Mombasa (11days), Dar-es-Salaam (14days), Lome (18days), and Douala (19days). ASHI is projected to drive down these margins and make Ghana's ports more competitive in the process.
Some of the other benefits of ASHI to the government will be better data, statistics, and data quality assurance upon which revenue due to the government will be calculated. Once shipping documents are attached to the ASHI form, it becomes difficult or nearly impossible for this information to be altered and as such leads to the benefits ascribed. For this same reason, security checks are also improved.
Beyond the cost saving and administrative benefits, ASHI satisfies the broader policy goals of trade integration and harmonization. From a global perspective, there are fifteen countries currently operating the ASHI system and thus, Ghana's adoption will facilitate trade harmonization. From the perspective of domestic policy, however, there does not appear to be a clear path or policy steering the industry. Part of the resistance for ASHI is that stakeholders feel tossed in the direction the wind blows and constantly vulnerable to the whims of the sector administrative bodies. A policy framework will address this and ensure better stakeholder buy in into reforms.
It is evident that the issue of delay is a major problem and obstacle at the ports in Ghana. More than one factor causes the delays and ASHI ascribes to solve a central element that cuts across and will positively impact all stakeholders. The most significant problem, which has to do with bureaucracy, is practically self-induced. The bureaucracy has become a means for siphoning money at the ports, as such the resistance from some key stakeholder groups. Every citizen in Ghana must be in tune with the greater good for the country, and ASHI serves that greater good.
Moving forward with ASHI requires additional consultations to incorporate feedback and address outstanding issues. Some stakeholders to be consulted should be GUTA, AGI, GIFF, CUBAG/FFAG, GNCCI, Chamber of Mines, SOAGG, GPHA, the ten regional Shipper Committees, and GRA and the GMA, FAGE, DICs, GCNet, Non-SOAGG shipping agents, middle to large scale importers and the petroleum commission. This is important to clear the misconceptions and also to discuss ASHI within the scope of a large policy goal and a medium to long term plan.
For interviews, please call IMANI's Deputy Head of Research, Ms. Maud Martei on 0501484220.
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