Ports in Ghana: Michael Luguje Presents GPHA, Ghana Ports and Harbours Authority

Interview with Michael Luguje, Director General of GPHA (Ghana Ports and Harbours Authority)

What is your assessment of the ports here in Ghana and the region? What position do they have? How is Ghana present here? How strong is Ghana compared to the rest of the region?

In the ECOWAS region, Ghana is the third biggest economy after Nigeria and Côte d’Ivoire. But when it comes to the port sector, after Nigeria, Ghana’s ports lead in terms of container volumes over Côte d’Ivoire. In total cargo volumes, Abidjan also takes second position. Lome came in much later with the construction of the MACS dedicated container terminal for transshipment. Because of that, Lome Port also started recording higher volumes of containers, but that is mainly because of the presence of MACS as a shipping line. When you look at the size of the economy and its attractiveness to captive trade, after Nigeria and Côte d’Ivoire, Ghana comes next. If we are looking at West and Central Africa, from Angola all the way up to Mauritania, then we will be at the top. Angola also has larger volumes in terms of cargo and containers. Angola will come next after Ghana, Nigeria and Côte d’Ivoire. In general, our position is quite attractive within the subregion. We do not only serve our captive business community, but also our landlocked countries, like Burkina Faso, Mali, and Niger. Some transit cargo also passes through Ghana to Togo, Benin, and Côte d’Ivoire.

How would you assess the development and the attractiveness in terms of how modern and efficient the port is? How does Ghana stand compared to other global ports?

In the ECOWAS region, Ghana is the third biggest economy after Nigeria and Côte d’Ivoire. But when it comes to the port sector, after Nigeria, Ghana’s ports lead in terms of container volumes over Côte d’Ivoire.

In terms of modernization of ports, Ghana is among the few ports that started modern container terminal development. We opened ours in 2004, which is the MPS Container Terminal 2. At that time, when we opened our terminal with gantry cranes, only Abidjan had gantry cranes in their terminal. Much later, others followed like Nigeria, Togo, and Dakar in Senegal. In terms of modernization, Ghana has always been in the lead, especially if you look at our MPS3 project that is also ongoing. Togo took the lead because of the MACS terminal in developing a modern container terminal. In terms of capacity, though, what we are developing in Tema is the biggest if you are looking at West Africa, minus South Africa which has a much bigger capacity than us, excluding Tanger in Morocco which also has a much bigger volume. Looking at sub-Saharan, Western and Central Africa, Ghana occupies an enviable position in terms of container operations and modern ports. Ghana is also among the few countries that has more than one port. Nigeria of course has a bigger economy. Despite Nigeria’s size, if you think in terms of single ports, Lagos Port separated from the rest, we still lead in terms of container volumes. But if you put all Nigerian ports together, that is where they have crossed the 1.2 million TEU mark. But Tema alone, as of the end of 2018, has been able to hit the 1 million TEU mark. Fortunately, for us, because of oil being found in the western region, we are also leading in terms of oil port services delivery for the Takoradi Port. There is a very ambitious project there to position Takoradi Port as the oil services hub for Ghana.

What are you doing for expansion and new projects at the moment? You will finish phase one in 2019. Phase two will be in 2021. What are you doing to avoid congestion in the ports?

The master plan of the two ports, Tema and Takoradi, is planned in accordance with volume growth. The volume is anticipated for cargo that is going to pass through the ports and the size of the ships that are also going to come through. We do all that taking into consideration that these are urban ports are right next to cities that are also expanding and that we are competing with city traffic and urban traffic. Therefore, any project you plan in a port has to look at the volume that it will attract, the traffic it will attract, and how that traffic is going to compete with urban vehicular movement to ensure that there is no congestion. The MPS Container Terminal 3 is going to start operations at the end of June this year, which is phase one and just two berths. We expect the construction of the third berth to commence by 2020 and hopefully finish by the end of 2020. So, by the time we start 2021, that new terminal will already have had three modern berths in operation. In doing so, how do we expand to such capacity and deal with congestion? That is why there is a project just outside the gates of that new terminal to build a new modern access road that contains a roundabout to ensure that we can split traffic. Apart from that, there is also a project that is meant to link that port all the way through the Tema Hospital Road to link up with the motorway that goes to Accra so that traffic moving in and out of that terminal has free and smooth access to link into the city. That project is very advanced. Of course, there are other phases of that terminal that are going to grow over time. Takoradi will be the same way. Takoradi’s expansion is happening in two phases. Takoradi originally was an export port, mainly dry, bulk cargos, bauxite and manganese, etc. The developers of this particular project, the mines, want to expand capacity and increase production. To do that, they wanted better capacity of infrastructure in ports and deeper berths to be able to bring in bigger vessels that can carry over 100,000 gross tonnages of bauxite and manganese. That is why there is a modern dry bulk berth that has been constructed in Takoradi today. Right now, we are in discussions to get a strategic private sector investor who will equip that bulk terminal and operate it to ensure that all our exporters of bauxite and manganese can have better facilities to be able to handle their cargo. Also, there is a dedicated berth that we want to use for oil services, what we call the Takoradi oil services hub. That is meant to be developed to provide all the modern services that can be given to oil sector operators. That is to ensure we are well positioned to service the oil industry that is growing in the western region. Of course, in doing so, the oil sector is a high value project and a high value project also attracts a lot of middle income to higher income segments of economies. We are seeing Takoradi and the western region more and more are attracting a lot of high value visitors, high value investors, high value city dwellers, and the rest. We realize we do not have to concentrate Takoradi on just export and dry bulk, low value cargo. We should plan for Takoradi to also have capacity to handle containers and other types of cargo. That is why the ambitious project that is ongoing in Takoradi is meant to also develop a container multipurpose terminal because we have seen container traffic also growing gradually through Takoradi as well. So, we have positioned both ports to meet both the present and future needs of Ghana. In Takoradi, we are doing so directly in association with the private sector. We have an indigenous Ghanaian operator called Ibistek who is constructing that Takoradi facility that is also going to manage the container multipurpose terminal. They are already operating an off-dock terminal called TACOTEL where, as part of their social responsibility, they have even assisted in constructing the access road from the Port of Takoradi out into that TACOTEL terminal. So, we are examining our new developments with the private sector in mind, the private sector as a strategic partner as we move along. In fact, the oil services also have plans to ensure that we get the best strategic private sector operator who will partner with GPHA (Ghana Ports and Harbours Authority) to develop the oil services in Takoradi as well.

What are the processes that you are putting in place to accelerate the clearing process?

No matter how large your port facility is, if the process to get cargo in and out is not fast enough, that facility will get congested within the shortest possible time. Therefore, all plans of port infrastructure and super structure development must also go in line with trade facilitation. That is why at the level of the Port Authority itself, we have invested in various IT facilitating tools that will ensure that we digitize all our cargo handling processes, vessel traffic processes, and cargo handling clearance. Once we do that, as a Port Authority, we have to interface with customs which is key because our ports are all customs ports. Boats cannot leave the port without clearance by customs. On the customs side there are also many ambitious projects to make sure they also automate their processes. Today, we have two major platforms that are assisting us, GCNet and WesBank. These two platforms are helping at the supra level to ensure that cargo clearance procedure is centralized and facilitated. Quite a lot of progress has been made from the port side. The investments we have made in IT facilitating programs for vessel clearance are at a very advanced stage. For the cargo handling component, it is also quite advanced. Now, integrating with customs is the second phase we are working on to help cargo get out faster. Ghana has been noted in the last year or two for what we call the Paperless Project. That was a very ambitious government initiative to ensure that cargo clearance through the ports goes as paperless as possible. There will be less paper, less human to human interaction, everything will be as digitized as possible so that cargo clearance time can be faster, bottlenecks will be eliminated, and it will also be cost effective. The more human interface, the more paper, the more human interaction you do, the more costly it is and the more time you waste.

Where are you in the development of this process? What have you achieved and what is next?

Achievement has been quite significant. All the stakeholders, freight forwarders, and importers that use the facility have assessed the program and scored it around 80-90% as a whole. From the port side, we have our own process and then we have the customs part of it. From our side, we have achieved close to 99%, whereas the customs interface is what is putting the entire project at around 90% achievement. Before this Paperless Project came about, in the port alone, for any single cargo unit to be cleared to leave the port, you needed not less than 15 to 16 different agencies that played some role in terms of inspecting the cargo before it could be cleared to leave the port. The Paperless Project has succeeded in reducing these to just three. Before, all these numerous agencies had to come at different times to inspect the cargo. Those three we have now must still inspect the cargo together. So, by that alone, even by layman’s estimation, you can imagine the amount of time that this system is dealing with. Of course, customs processes itself had several units where the importer or the clearance agent had to move from desk to desk to get cargo documentation processed. Now, from the freight forwarder’s office at his computer, he will be able to access a central system through the manifest and other documentation, post their declarations online, and then probably only have direct interactions with the clients when there is a need or if goods have to be inspected physically. If you are fortunate enough for your cargo to be tagged as a green channel cargo, you do not need human interaction. Payments themselves that used to be physical, going to various banks to pay, now, we have been able to assist as part of the Paperless Project for importers and freight forwarders to make payments online through the banking system as well. So, quite a significant amount of time has been saved and a lot of effort has been reduced once the human interaction and all the other issues of illegal fees that used to be paid have been eliminated to a larger extent. Outside the ports own enclave, the Paperless Project was also meant to reduce many of the physical road barriers that more or less created a lot of bottlenecks along the corridor and in moving our cargo out of the ports to deliver to the nation. Before, there were more than 20 customs barriers from Accra all the way to the border with Burkina Faso. Today, they have been reduced to about three. The Paperless Project has made a lot of significant progress.

In terms of time, what is your assessment for how long it used to be and how long it takes now?

Before, if you brought in your cargo, where you had 16 agencies to inspect and do all the physical things, once your container arrived in Tema Port, it could take you at least one week to go through all these processes, get everybody inspecting, etc., for some it could be even longer than that. Today, if your container is not meant to go through physical customs inspection, you could do that within four hours. That is the single most important impact you can see in terms of the effect of the Paperless Project.

What are the challenges left now?

As a Port Authority, trade is growing and the economy is growing. Ghana is among the fastest growing economies in Africa today. Therefore, once that is happening, we expect cargo volumes to also go through our port. So, we need to be ahead of the trade in terms of providing the necessary infrastructure and facilities. The challenge is to expand our facilities, not just within the port, but also access roads outside the port to ensure that cargo does not build up in the port because it cannot easily move out. We are seeing quite a lot of effort already, but specifically, we today want to see the government expanding the road infrastructure outside the port into the hinterland for cargo to move, and not just road infrastructure but also to provide other modes of transport like rail and water. The good news is that the government is ambitious in that area. In terms of the road infrastructure programs, right now, if you come into Tema through the motorway, you can see quite a lot of work at the end of it where there will be an interchange that will split off traffic for us. There is also a government project to build a railway line from Tema to Akosombo. There is an ambitious program to link that up along the Volta Lake to the northern part of the country. We are quite excited as a port that the government is supporting us in the area of roads and motor structure. We are expanding the port and the Container Terminal Project is ongoing and on schedule, fortunately. The partners are part of the work. We are expected to open the first two berths by the end of June and the third berth will be constructed over 2020. From our side as a Port Authority, we have to expand facilities for dry bulk. Today, Ghana is a growing economy. The building and construction industry is flourishing. Therefore, the demand for building related materials, including cement, is growing astronomically. Just six or seven years ago, we had just two cement manufacturing companies in Ghana. Today, we have seven. Each of them that will come in will need facilities to bring in raw materials to be able to feed their plants. Because of that, we need much more capacity dry bulk handling facilities in Tema. That is why our dry bulk berth is expected to be expanded. We need a deeper draft and we need to equip it with modern handling facilities to be able to get it to meet the demand at stake. Of course, the oil berth in Tema Port which was built so many years ago also needs to be modernized and upgraded. That is a project that is on our table today to get completed. Once we do that, we have also noticed that everything that is called land within the port is finished, fully consumed, yet we are getting demands by the day for waterfront land that is closer to the port. So now, the best option for us is to reclaim land from the sea and make it available for any port businessperson who needs lands to be able to expand. That is an area we are working towards dealing with, whether solely as a Port Authority or with interested partners that want to come along with us. In Takoradi, we have the oil services hub that we are still sourcing for private sector partnership to develop it. Once we have sourced private sector partnership, the good news is that the oil industry players are calling on the doors of the Port Authority on a daily basis that they want that project to be up and running because they are ready to settle in and do their business. Of course, once vessel traffic is increasing along our coast, the critical importance of dry docking facilities is also at stake. That is why the Tema shipyard is also so much on the top banner of government. The Port Authority is working with the Ministry of Transport to also get a strategic investor that will support us to upgrade and modernize the Tema shipyard to be able to at least provide all the ship repairs, fabrications, and probably even build new ships. A similar project is also in Takoradi with the private sector to have a floating dock that also can help us do repairs to oil vessels and rigs. Those are the key projects and focus for us going from now into the future.

Do you have a final message?

The Port Authority’s own focus in terms of social responsibility and the port community, the kind of service relationship we have with the port community, we consider them as key partners to the port’s survival and growth. There is a very ambitious program to involve them in day to day decision making and future planning of the port. This is through what we call the Port Community Development Association. We expect that structure to be set up before the end of the first half of this year. That is meant to create a very permanent forum where every port stakeholder and operator can be able to talk to each other and their landlord, which is the Port Authority, to feed into our plans and development programs going forward. As part of our social responsibility, we are also looking at the services we are providing to the landlocked countries, Burkina Faso, Mali, and Niger. We have seen over the years that transit traffic to these countries has been growing. We were able to pass the one million ton mark last year serving these countries. When you go to our border in Paga where the trucks cross into those countries, the parking facility is not in the best shape. There is demand for the Port Authority to support in developing a very modern truck parking facility there. That is a major project we want to develop this year. We will be doing that with any private sector operator that will be interested in supporting us. What is interesting about that project is that it is not just a Port Authority project but also a trans-ECOWAS trade facilitation project. If we are able to do it, it contributes to meeting that ECOWAS objective of opening up the countries for trade and making sure corridors are smooth and facilitate trade. We have a third port in our country called Keta which is located in the Volta region. The President just signed an executive instrument declaring that area as a port. What we are doing now is conducting a feasibility study that is meant to help us to design that port into a modern, multipurpose facility that can take care of different types of businesses. We expect that project between the first half of this year to have had that feasibility ongoing. Then that port is also open to all investors that are interested in anything that is a port-related activity. It is a green field, so any investor that wants a waterfront facility to do business, this is the time for them to call on us. We already have one operator, Diamond Cement, that has expressed interest. Their factory is located just on the Ghana side of the border of Burkina Faso, so they want to bring a jetty in that area to bring in all their raw materials from there through the Port of Keta to feed their cement factory. Apart from that, we want to develop the Port of Keta into a modern, multipurpose port that can handle different types of cargo, not necessarily competing with Takoradi and Tema, but dealing with specific cargo that is going to contribute to the overall development of our country.

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