Why CTN module can be a nuisance to trade

BY: Maclean Kwofi
 Mr Emmanuel Nti
Mr Emmanuel Nti

Over the last four years, total goods passing through the country’s seaports witnessed an average growth rate of 4.3 per cent per annum.


After a historic decline of 13.84 per cent in 2014 (mainly due to the depreciation of the cedi in that year), cargo throughput has enjoyed steady growth in the preceding three years, rising from 17.1 million tonnes in 2015 to 21.5 million tonnes in 2017.  

In terms of growth rate, data from the Ghana Shippers’ Authority (GSA) show that cargo through the ports rose from 7.2 per cent in 2015 to a record high of almost 16 per cent last year.

The growth is also attributable to the expansion works at the Tema and the Takoradi ports, the general socio-political stability, the commencement of commercial production of oil and gas in Ghana’s waters and the smoothening of the various rough edges that hitherto impeded trade.
 
Together, the developments have ensured that Ghana earned its place as a haven for trade in the sub-region, and the continent as a whole.

For instance, the country took a giant leap towards ease of doing business reforms when it introduced the Single Window platform that provided a comprehensive set of online services to the trading community.

As these positives began to manifest, the issue of government earning the right revenue from the ports remained on the lips of almost every person.

With the ports being a critical part of government’s revenue stream, attempts to collect all revenues due the state are welcoming.

However, while that is laudable, such measures must not be revenue-biased to the extent that they threaten to strangulate the current flourishing nature of trade and the positive image that the country enjoys in the minds of shippers, especially those in land lock countries.

This explains why the current controversy surrounding the CTN should be looked at devoid of emotions and entrenched positions.

The CTN module which took effect on October 15 is to enhance the security functions of the government, generate real time information and statistics, revenue collection and trade facilitation at the global scene.

This was revealed in a statement dated October 14 and signed by the Commissioner-General of the Ghana Revenue Authority, Mr Emmanuel Nti.

Genesis of CTN

Indeed, the CTN is a way of verifying the contents of every cargo, and then tracking that cargo between ports. With the module in place every cargo travelling by sea must be issued with a CTN by an approved agent prior to departure.
 
As a means of improving the security around marine shipments, the CTN was introduced following the September 11, 2001 terrorist attacks in the United States of America (USA).

Most countries within European Union, Asia, the Middle East, and Africa have all tried implementing the module.

No success story

However, the CTN has been tried in most African countries such as Nigeria, Ivory Coast, Cameroon, Kenya and Sierra Leone yet there are little success stories to share.

Nigeria tried the module in more than one and a half years but after the introduction of the CTN, concealment, undervaluation, over-valuation, smuggling and illegal drugs and arms shipment continued unabated in the ports.

In 2010, over four incidents of large scale seizures were recorded at the Tin Can Island Port while the illegal arms shipment from Iran intercepted at the Apapa Port remained a huge embarrassment to Nigeria.

Ghana roped in

The year 2018 opened for the Ghanaian shipping industry with a controversy spurned by the introduction of what stakeholders perceived as new regime in shipping calculated to increase their cost of doing business the ports.

A lot of heat was generated. Prominent among these stakeholders were members of the Joint Business Consultative Forum (JBCF). In a petition to the Presidency, the JBCF registered its opposition to the new scheme.

The controversy trailing the policy was such that the government had no-option than to intervene so as to unravel the circumstances surrounding the conception and introduction.

Agitations by shippers

The module was suspended three times this year to pave way for stakeholder consultations yet the CTN was forcefully implemented amid strong opposition.
The postponement was occasioned by agitations from the Ghana Union of Traders Association (GUTA) and the Ship Owners and Agents Association of Ghana (SOAAG) against the system.

The trading community had explained that the CTN, if allowed to take effect, would increase cost of clearing, delay the turnaround time and infringe on aspects of the World Trade Organisation’s Trade Facilitation Agreement (TFA).

As a result, it asked the Customs Division of the GRA to use the Customs to Customs (C2C) method recommended by the TFA to achieve the same results that the CTN is envisaged to achieve.

But in a determined effort to convince shippers to embrace the new regime, implementing agencies of the module have recruited many unprincipled adventurers in the maritime industry and even beyond who tried to outdo one another as they laboured to convince the largely unimpressed operators and stakeholders on the merits of the CTN.

Even some few days into the implementation, the Ghana Union of Traders Association (GUTA) says its opposition to the CTN is indefinite, shaking off ongoing concerns by some people that the trade group is divided on political lines on the policy.

“We want to be emphatic herein that our opposition to the CTN is infinite and, therefore, any attempt by policy implementers to cunningly rope us into the module scheme in the future will be fiercely resisted,” its President said at a press conference in Accra.

Conclusions

In its current form, it is obvious the controversies trailing the CTN module will defeat the purpose for implementation and rather lead to a duplication of systems and also impede trade in the country.

The revenue authority, shipping lines and other stakeholders in the shipping business are now recovering from the protest which led to importers and freight forwarders shutting operations at the various ports for close to a week.

Shipping lines for instance have complained that their frequencies from the various ports of origin to Tema reduced drastically when importers decided to halt shipment in August this year, a phenomenon which negatively affected their revenue.

Moving into the festive season which is often the peak for imports, the government needs to tread cautiously with the implementation of the module, especially at a time when it has a huge revenue target to meet.

The government should first of all study the entire procedure once more, identify clearly the objectives of the module and figure out clearly the way forward in the best interest of industry players and the state as a whole. — GB

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