NPA takes steps to improve access to Trade: -Removed Demurrage -Gives customers their containers on low rate
The recent business climate meeting held in Gompa City seems to be moving into motion. At the just ended forum participants noted that access to trade was difficult due to the time, process and cost. Attending the two-day program under the theme: “Resolving constraints to Trading Across Borders” participants recommended the need to increase the transaction time to 24 hours and the number of days to clear a container from the port among others.
In response to some of the recommendations, the NPA along with other ministries and agencies have taken several steps to improve the business climate in the country. According to reports, the Freeport of Monrovia will beginning April 1, 2019 runs a 24 hour operations. With this new mechanism, the banking sector, LRA, security agencies, NPA staff and other port operators will run three shifts on a daily basis. This will also improve the rate of transactions, importers will be able to clear their containers on time without paying the extra charges that come with storage and fees charged by owners of containers trucks.
The Managing Director of the NPA, Hon. Bill Twehway also informed members of the press that fees charged by shipping lines for demurrage will no longer exist. This decision comes against complaints by customs brokers and importers that they were been heavily charged for demurrage and other storage activities against their will.
The NPA boss also noted that as a means of improving the business climate, owners of overstayed containers will have access to their containers beginning next month. “It is wrong for us to keep these containers in the port simply because people do not have the means of clearing them. It makes more economic sense to give them their containers at a very low rate than to auction it” Hon. Twehway noted. He told journalists that a strategic payment plan was underway to assist those who are unable to clear their containers on time. “As a pro-poor government, we will design a payment plan based in good faith so that you can pay for your container through installments” he said.
Information coming out of the Gompa meeting also said that companies located in Guinea have also expressed the desire to increase the rate of transshipment of containers through the Freeport of Monrovia. They also call on the LRA to reduce the tariff or FOB so that they can rapidly increase the number of containers shipped on a monthly basis. According to information, the Freeport of Monrovia is closer than the port at Conakry and once leverage, this could spur economic growth between the two countries.
These changes come against the backdrop of the constitution of the Business Climate Working Group (BCWG) by President Weah in late October of last year. The President mandated the BCWG headed by Minister Samuel Tweah to explore opportunities for improving the business climate through the identification of “quick wins”.
The BCWG has since hit the road running with the holding of series of high level and technical meetings with the private sector and donor partners as a platform for identifying some of the binding constraints that inhibit the ease of doing business in Liberia.
For example, the WB 2019 report noted that on average, it takes more than 18 days to obtain a business registration. But to date, the Liberia Business Registry says they have cut the number of days by 13; meaning that the process has improved from 18 to 5 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.
At some of the business climate meetings, participants have called for other reforms to include the reduction in taxes for agriculture implements. According to them, the high taxes is forcing them to lay off workers as well as increase their production cost. The recommendation to remove the Pre-shipment Inspection and fast track the process of obtaining an import or export declaration permits have gone into action. According to the Ministry of Commerce, it no longer takes 3-5 days but rather 3 hours to obtain an IPD or EPD.
Massive improvements in domestic revenue mobilization on the part of the LRA has been made, with an online electronic payment system for both income and real estate taxes, the level of in person interaction has been reduced drastically. The WB noted that in person transaction was vulnerable to corruption, delayed and bureaucracies. More step are underway to have a one-stop shop which will massively fast track the business process.
At the recent business climate meeting held in Gompa City, participants called for the practical actions and reforms in trading across borders to include: increase in the number of days for clearing a container from 5 to 7, 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 coming out of these business climate meetings, the NPA in close concert with collaborating ministries and agencies has decided to take practical steps in addressing some of the impediments to trading across borders.
On Saturday, the Managing Director of the NPA, Hon. Bill Twehway noted 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). He 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. Hon. Twehway said that the objective of the Pro-Poor government was not to stifle the business community but rather to provide opportunities to improve their living standards. “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 noted.
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 FOB is reduced from 2.5%. As a means of increasing transshipment, the NPA has 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 PAPD. A new partnership framework that align donor partners support to the country’s national development agenda. The government recently had several sectors dialogue with the Ministries of Agriculture, Education and the Liberia Land Authority. In the coming weeks, meetings with the Forestry and Mining sectors will also take place.