As movers of Ghana’s maritime industry, they braved the odds of an anomalous pandemic to offer their seamless services to help maintain the fiscal soundness and resilience of an import-laden economy.
Shipping lines shoulder the nation’s international trade aspirations, and with their never-ending voyages, they cart both imports—which keeps millions of traders in permanent employment, and exports—from which the nation gets its most treasured forex earnings.
Despite feeling the brunt of the virus with blank sailings—where sailings have had to be cancelled—and, in most cases, sailing at half of their capacity, they have provided comfort and convenience to Ghanaian shippers to their loss.
It is mostly evident that the industry romance between shipping lines and other maritime stakeholders is firmed up and with the same level of reciprocity, Ghana’s maritime business could be set for even greater heights.
President of the Shipowners and Agents Association of Ghana (SOAAG) and Country Manager for Pacific International Lines (PIL) Robert Oram and his deputy Adam Imoru Ayarna share more insights on this forward-looking partnership…
Q Shipping lines play a pivotal role in Ghana’s international trade. Tell us about how your members have contributed to the nation’s development journey.
A&R Considering the reliance on imports by Ghana the role of shipping lines in providing access to key markets is crucial as well as providing service to move the major export commodities from Ghana such as Cocoa and Cashew which generate much needed foreign currency.
Shipping is a much more cost-effective form of transport especially for high volume commodities. The importance of shipping to the country is clear when you consider the biggest and most important infrastructure project in the recent memory is the port development by MPS.
You will be aware that global trade was heavily impacted during the early months of COVID 19, but member lines continued to call Ghana with some blank sailings and other sailings at less than half capacity, costs associated with these calls were not passed on to the Ghanaian economy but absorbed by the lines.
Not forgetting the extended free days and hugely discounted demurrage given to importers during and immediately after the lockdown.
All these were significant costs to the lines and we should not forget the protocols put in place by the lines with the aim to protect both our staff and customers whilst still ensuring that we served the market without any serious down time.
Q:To what extent has the expansions to Ghana’s ports infrastructure enhanced efficiency of the shipping business for liners calling at our ports?
A&R: MPS terminal 3 has improved efficiency of vessel handling and through the increased draft has opened the opportunity to bring larger vessels to Tema. Longer term this may lead to costs savings through economies of scale.
Q: What is your position on the Africa Continental Free Trade Area and how are shipping lines repositioning themselves to drive this novel agenda?
A&R: Most shipping lines are active in all the main African markets so will need little repositioning. In the end shipping lines will react by adjusting schedules where necessary in response to changes in customer activity.
For example, if customers in the extreme East or West of Ghana opts to ship via Togo or Ivory Coast because the overall cost is cheaper this may lead to an adjustment in the market and therefore require changes by the lines to meet the new market.
Q: Some shipping lines have named Tema Port as their transshipment hub for their Africa operations. What are the direct benefits of such arrangements to Ghanaian shippers?
A&R: With lines utilising Tema as a transshipment hub it should provide greater connectivity to a wider range of markets both within Africa and beyond. Given the previous question concerning ACFTA better connectivity with other African countries in this new environment will be key to maximizing the benefits of such an agreement. A free trade agreement with the rest of Africa is rather meaningless unless you can get your goods to those markets.
With Ghana’s infrastructure its shippers may be poised to take advantage of the FTA. It should be noted that the current regulations affect transshipment negatively from a cost perspective compared to other similar ports, we expect the authorities to appreciate these facts which has have been raised severally to them, review regulations and processes with its direct effect on cost.
Naming or targeting Tema port as a hub and actualising it to its fullest are two different issues, but we are confident that once the transshipment regime/cost is reviewed the full potential of Tema becoming an important hub can be realised. Transshipment is driven by cost, ease and efficiency.
Q: In this time of Covid, what do you seek from government, in terms of reliefs and regulations, to maximise the productivity of shipping lines and the resulting impact on the Ghanaian economy?
A&R: I do not believe lines are looking for financial support but stability in terms of local regulations etc. make it easier to plan and run a business as you have security in the environment for a number of years.
The government seem to have done a good job especially when we see the impact of Covid on many countries outside of Africa but in terms of impact on the Ghanaian economy I would suggest this is yet to be seen fully.
Import volumes seem to have been resilient but export volumes have been hit and the impact when Government has to begin paying for the measures put in place to combat Covid are unclear.
Q: What is the outlook for Ghana’s seaborne trade; how brighter or gloomy is the situation?
A&R: Given that government is forecasting a return to strong growth next year and the majority of Ghana’s economy is based on imports it suggests that seaborne trade to and from Ghana should continue to thrive.