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Ghana increases spending on transport infrastructure

Ghana increases spending on transport infrastructure

Moves by Ghana to expand port capacity are helping to reduce processing times and costs, although congested intermodal connections still limit throughput.

Further spending to reinforce connectivity in road and rail networks will be necessary for Ghana to significantly increase its shipping capacity, but infrastructure upgrades and regulatory reforms are nonetheless helping to improve overall efficiency.

Maritime development

Currently, almost $2bn worth of investment is being put toward upgrading Ghana’s two major ports: Tema and Takoradi.

A $400m development programme at the western Port of Takoradi will see the installation of new dry bulk, liquid, container and roll-on/roll-off terminals, as well as an offshore oil supply base to take advantage of the port’s proximity to Ghana’s offshore oil and gas fields. Work on the initial stages of the development is due to be completed in the second half of 2017.

The extensive expansion and modernisation project will allow the Port of Takoradi to better meet the needs of the hydrocarbons and mining sectors, according to Richard Anamoo, director-general of Ghana Ports and Harbours Authority (GPHA), the state agency in charge of maintaining and regulating Ghana’s maritime services.

“What we are doing in [Port of Takoradi] is to expand the port to take care of the bulk carriers in terms of bauxite, manganese [and] also cement that is coming in,” Anamoo told media. “Also, because [Port of Takoradi] is closer to the oil fields, we have to create the facility for oil service vessels in order for them to come in quickly and load.”

The Port of Tema – Ghana’s primary maritime freight handling centre – will also be expanded over the next five years. The port, which processes 85% of Ghana’s seaborne freight, will have its capacity increased threefold to 3.5m twenty-foot equivalent units.

Netherlands-based APM Terminals, French firm Bolloré Africa Logistics and GPHA are jointly undertaking the $1.5bn expansion project, which will involve the construction of four deepwater berths and extensive cargo handling and storage infrastructure.

The development of the Port of Tema will not only improve operational capacity, but also result in an impact on freighting across the region, according to Joseph Asare, managing director at APM Terminals Ghana.

“By the end of both development phases in 2021, the goal is to significantly decrease congestion and increase capacity,” Asare told OBG.

Increased connectivity

While Ghana’s ports are set for a rapid expansion in capacity, some of the expected gains in efficiency may not translate to increased connectivity unless land links are also reinforced.

Nearly 90% of domestic freighting in Ghana is conducted by road, and major upgrades to the country’s road network, such as expanding the Accra-Tema Motorway into a six-lane highway, have been initiated with an agreement signed with a private consortium for the motorway’s $1.5bn expansion.

However, Fifi Fiavi Franklin Kwetey, minister of transport, recently told delegates at a transport conference in Accra that more needs to be done to improve connectivity.

“Our intermodal transport system is inadequate and additional investment is needed in port infrastructure and hinterland link systems, including roads, railways and inland waterways,” Kwetey said at the conference.

With much of Ghana’s existing 950-km rail network running at limited capacity due to insufficient investment, the movement of large volumes of freight is restricted, with some companies such as Ghana Bauxite Company opting for road transport instead.

Development efforts would not only benefit Ghana directly by expanding links inland, but would also facilitate transit and trans-shipment trade with Ghana’s regional neighbours, such as Mali, Burkina Faso and Nigeria.

“Africa’s real GDP growth rate may increase by up to 8% in the next couple of years,” Benoît du Souich, managing director for Bolloré Africa Logistics Ghana, told OBG. “The continent needs to prepare for this by putting the proper infrastructure in place.”

Regulatory reforms

Meanwhile, regulatory reforms aim to streamline bureaucratic processes while improving efficiency, thus significantly reducing delays.

The Ghana National Single Window (GNSW) system, which came into effect in September 2015, allows local importers and exporters to submit documentation electronically to one processing point, giving Customs and other official agencies access to digital paperwork.

Processing and turnaround times for freight has decreased from up to 10 days under the previous Destination Inspection Companies to 48 hours, following the introduction of GNSW. Additionally, there has been a reduction in shipping time and costs, as well as a lower risk of spoilage.

The system could enhance Ghana’s trade competitiveness by 50% within the next five years and save the country $200m annually, according to Uthman Oluwatoni Aminu, manager of project delivery at West Blue Consulting, the technical partner of GNSW.

In its 2016 “Doing Business” report, the World Bank notes that Ghana has made moderate progress in improving trade across borders over the course of 2015.

According to the report, Ghana was able to reduce border compliance time for importation through the development of electronic channels. Despite the implementation of these reforms, however, Ghana still ranked 171 of 189 economies on the World Bank’s index for trading across borders, which measures the cost and time of border compliance procedures for imports and exports.

Valentina Mintah, CEO at West Blue Consulting, forecasts that the GNSW will propel Ghana from 171 to 121 in the World Bank rankings by 2021.

By bolstering maritime freight handling capacity at its ports and improving terrestrial links, Ghana is set to further strengthen its domestic and international connectivity. 

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