Liberia: Port Authority, Finance Ministry Strapping off Demurrages to Alleviate Economic Hardship
MONROVIA – The Government of Liberia has stepped up efforts aimed at mitigating some of the woes being experienced by the economy.
Report by Alaskai Moore Johnson, [email protected]
At the moment, the country’s economy is in what some economists and critics have termed as “free fall,” where the values of some of the very basic things are just plummeting to the detriment of ordinary Liberians, who are the end users.
The World Bank Doing Business Report (WBDBR) ranks Liberia 174 out of 190 developed and developing economies. This means that the country has a low score in the World Bank ease of doing business.
To mitigate this situation, which has created a serious hardship in the country, President George Manneh Weah has mandated the Minister of Finance and Development Planning, Mr. Samuel D. Tweah, as Chair of the Business Climate Working Group (BCWG), to explore emerging challenges and opportunities for creating a business-friendly environment.
In order to achieve this, Min. Tweah and other members of the BCWG — the Ministries of Commerce and Public Works, Liberia Revenue Authority and National Port Authority — have moved into action by holding series of high level and technical meetings with key actors in both the public and private sectors. The Minister along with his team, also desirous of improving the country’s ranking in the ease of doing business, has taken a “dynamic and actionable dimension.”
“The manifestation of the political will by the President and the availability of technical expertise there should be no reason why efforts cannot be made to achieve success in the business climate in this country,” Min. Tweah said, according to a Finance Ministry statement.
Taking Actions
One of such actions as was announced Saturday, March 23, by Mr. Bill Twehway, Managing Director of the National Port Authority (NPA), is that as of April 1, 2019, importers will no longer be charged demurrage — the charge payable to the owner of a chartered ship in respect of the failure to load or discharge the ship within the time agreed.
The MD of NPA, which is considered the “gateway to the nation’s economy,” also told reporters that shipping lines were charging importers excess fees for demurrage. Additionally, the NPA boss noted that owners of containers in default at the port can now breathe a sigh of relief as they will be paying very minimum to take their containers from the port.
According to him, the objective of the “pro-poor government” is not to stifle the business community but rather to provide opportunities to improve the business climate and living standard for Liberians.
“It is not in our interest to keep people containers in the port due to their inability to pay charges and so going forward, we will give them their containers at a very low cost beginning April,” he assured.
At a recent business climate meeting held in Gompa (Ganta) City, Nimba County, participants called for the practical actions and reforms in trading across borders including increase in the number of days for clearing a container from five to seven, removal of the 10% increase in container handling charges by APM Terminals, extension of the port operations to 24 hours and the removal of illegal checkpoints along business routes.
In response to some of the many recommendations, the NPA MD said they, collaborating with other ministries and agencies, have decided to take practical steps in addressing some of the impediments to trading across borders.
Among further actions that the Liberian Government, through the BCWG, has taken is to reduce the number of days by 13 to now obtain a business registration.
The WB, in its 2019 report, noted that on average, it took more than 18 days to obtain a business registration. But the BCWG states that to date, they have cut the number of days by 13, meaning that the process has improved from 18 to five days.
“At the Ministry of Public Works, it no longer takes 25 days to obtain construction permits. With the establishment of a website and online system, it now takes only seven days,” the MFDP said.
They also stated that in some of the business climate meetings, participants called for other reforms to include the reduction in taxes for agriculture implements. Those participants contended that the high taxes are forcing them to lay off workers as well as increase their production cost.
The Ministry also stated that the recommendation to remove the Pre-shipment Inspection and fast track the process of obtaining an import or export declaration permits (I/EPD) have gone into action; adding that “the Ministry of Commerce no longer takes three to five days but rather three hours to obtain an I/EPD.
International Trade
According to a MFDP statement, discussions are also underway between the LRA and Guinean businesses to increase the rate of transshipment by using the Freeport of Monrovia, which is much closer than the port in Conakry. At the business climate forum in Gompa, delegates from few Guinean companies closer to the border noted that they are willing to increase the rate of container shipment once the “free on board” (FOB) is reduced from 2.5%.
The NPA announced that as a means of increasing transshipment, they have acquired a parcel of land in Nimba County, for the establishment of a dry port. This will reduce transaction across, increase storage facilities, create jobs opportunities and ensure peace and security in cross border trade Of late, the government has been holding sectors dialogue as a means of improving the business processes, ensuring value for money and ensuring efficiency in the deliverable of services under the Pro-poor Agenda for Prosperity and Development (PAPD).