Ghana’s PSL (Platinum Shipping & Logistics) to Expand to Benin, Mali, and Niger

Interview with Kofi Akuamoah Boateng, Chairman and General Manager of PSL

What have been the latest developments and trends in the logistics and shipping sector? Where is the highest demand coming from?

The highest demand is from container shipments and air shipments. The segment picked up and then dropped again. It is difficult to pinpoint what the problem was, but there was a general drop everywhere last year. It could have been caused by government policy.

Could it have been related to the elections?

It was the elections because people really did not want to invest. They wanted to wait until after the election for everything to calm down before investing. Currently, we are in the seventh month, but the sector is just now picking up. The new government is not settling in quickly. It has truly affected everyone. Since we work for companies, when they are affected, we are affected.

Are you only acting in Ghana or you are also present in other countries?

We are present and strong in other African countries such as Burkina Faso and Togo. Because of our partnership with Hellmann, we are present in over 140 countries. We were active in Sierra Leone at one time, but we ended that branch due to lack of profitability.

We are present and strong in other African countries such as Burkina Faso and Togo. Because of our partnership with Hellmann, we are present in over 140 countries.

Do you have any plans for further expansion in the region to enter into new countries?

Yes, it has been our plan, but implementing this plan comes with growth and business booming. Until business picks up, our plans cannot materialize.

Which countries were you exploring?

We are looking to start offices in Benin, Mali, and Niger.

What are the greatest challenges facing PSL currently in the sector?

One of the greatest challenges in the sector is the cost of doing business. Since last year, there has been a significant increase in port charges, shipping line charges, and the exchange rate. The cedi keeps depreciating and it certainly affects us. If you execute a contract in June, with a certain amount of money at a certain agreement, by September when you are paid and the cedi has gone down, it is a huge loss.

Is there interest from the government to do more for logistics and shipping in terms of regulations?

Yes, they are doing their best. Recently, they reduced and removed some taxes, as well as removing some levees. But, it is going to take time, possibly a minimum of three or four months to take effect. For example, goods such as spare parts for machinery and cars used to attract duties. Now the duties are gone but the stock is still there. The stock has already been paid for and must be sold at a certain price. The government is also checking the exchange rate, but it appreciates for some weeks then it depreciates again.

Overall, the cedi is stable when compared to other currencies in the region, though.

The cedi is quite stable, but it keeps fluctuating. The CFA is not doing well at all, either. We do business with the West African sub region and everything is in CFA. Sometimes, we give a quote and after a month when you go back to the customer, it is thirty percent or forty percent more, and they do not understand.

Looking ahead for PSL, what is your vision for 2017/2018? What would you ideally like PSL to achieve in the future?

Ideally, we want to be a preferred logistics company in the sub region and beyond. Though there are hurdles, though there are challenges, we will get through them and we are going to achieve our target. By the next time you see us, I am positive we will be in Mali, Niger, and Benin.

Are you interested in entering into the Ivory Coast?

We have a very good partner there. If we were to enter there, then our partner would become a competitor. So strategically, we are not going into the Ivory Coast.

Is there anything else you would like to highlight about Ghana and the overall environment for business?

My industry is a very broad industry. We have the shipping lines, the airlines, the government, the private companies, and more. Ideally, we should use one exchange rate. The shipping lines have one exchange rate, the government has another exchange rate, and the banks have a different exchange rate. Sometimes, when you are being paid, it goes through the bank and their exchange rate is very low. For example, if you work with 1,000 USD and your profit margin is 100 USD, the 1,000 USD is being paid and by the time it goes through the bank, your profit margin is gone.

You would like a unified exchange rate across the different sectors?

Yes. With that, when you give a quote or provide a service, you know that is it and it will not fluctuate. Because when it does, it makes us more expensive. In Ghana, we have quite expensive duties compared to other West African countries, aside from Nigeria. Nigeria is much higher, but it is a case on its own. But compared to Togo, Benin, or Burkina Faso, we are quite expensive. Another major point is financing for small and medium enterprises. The interest rate is too high. It is killing the small companies because the private sector is borrowing, the government is borrowing, everyone is borrowing from the same commercial banks. You must come up with huge collaterals and the exchange rate is very bad. You need big margins to be able to pay back loans and that is not good for the industry and across the board for all companies in Ghana. It is a very big challenge for all of us. Even if you are able to assess the credit, the interest rate is far too high. Within the last three months, the Bank of Ghana has reduced its prime rate twice. The first time was 1.5 percent, recently about 1.5 or 2 percent, 2.5 or 3 percent in all. The commercial banks must reduce their interest rate, but it is still paid at the same rate. The Bank of Ghana must do more. When the prime rate comes down, they should be able to push the banks to come down, as well. When they do more, we are going to achieve our aim.

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