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Logistics thinking

Interview - August 19, 2014
“The GSA has brought trade to the fore in this country. There is no doubt about it. People don’t consider the importance of logistics. Over the last 40 years, what the GSA has done, which is a monumental achievement, is to bring to the fore the fact that shipping has an important role to play in our economy,” says Dr. Kofi Mbiah CEO of the Ghana Shippers’ Authority (GSA) in this interview covering the transport and logistics sector in Ghana. Dr. Mbiah talks about how GSA is persuing the technological enhancement of the business of trade and transport by introducing systems such as "MOBISHIP" system, which allows importers track vessels using a smartphone. “But that is not enough,” he says. “We have to go further.”
West African countries are continuing the process of regional integration that could result in full common markets and a monetary union in the near future. Could you start by sharing your view on ECOWAS, which is chaired by Ghana, and the potential for future economic activities?

There have been various attempts over the years to try building an economic regional block through ECOWAS. Some grounds have been covered in terms of setting the framework for collaboration and partnerships and for engaging in various economic activities. Despite the achievements, a lot still remains to be done if we are to realize the ultimate dream of full integration and a free trade area.

There have been achievements to the extent that we were able to pass a number of protocols. One is the ECOWAS protocol, on free movement of goods and persons. There is free movement of people within the ECOWAS sub- region. People don’t need a visa to travel across our borders. They have a 90-day period to stay in any country in the bloc. We have a solid block, the Francophone bloc, with a common currency. There are attempts to have a common currency for the whole bloc, but it is proving very difficult to do.

Ghana was experiencing a great moment in its development but now there are signs that this is slowing down. There was a National Economic Forum held last month to address this. How can GSA help to improve current economic situation?

GSA belongs to the transport and logistics side of the business equation. It is unfortunate, but only recently the president mentioned the word ‘logistics’ in his speeches. Logistics is the driving force for any economy. It is about your movement, how you carry things. It is about creation and consumption. For us, as GSA, because we deal in logistics, we feel it must be placed higher on the government’s agenda for development. It must be given its place in the policy framework of things.

One key thing is infrastructure. Unfortunately, we are stuck in the past. Transportation plays a key role in development. We haven’t been able to create an integrated transport system that allows coordination because the physical infrastructure hasn’t found a proper mix. Investment in this area is important. Apart from the road, rail and other such physical infrastructure, the challenges that bedevil the means of carriage would also need to be addressed. With respect to inland waterway navigation, we have to address the issues relating to appropriate navigable channels. In view of the inadequacies we are not able to utilize our water bodies efficiently for the purpose of meeting our logistical needs.

We need an integrated transport system and injection of capital. Energy is the driving force for all of these things. You require energy for transportation, so investment in energy is also key. Logistics and energy must go together. We need to get the right energy mix for our development.

The sea is a very useful resource, but we need to create ports, shelters for vessels, avenues to ensure you can receive vessels and send cargo. In regards to exports, we must look at the global marketplace to diversify. You must look at areas where you have a competitive advantage. This is where the Ghana Shippers Authority plays its role in providing information and advice to shippers to enhance their competitiveness, especially in respect of exports. South American countries, they send bananas all over the world. We had good bananas before them, but we couldn’t carry our bananas to the world. We must leverage our climate and good governance advantages. We must take that potential that we have, and diversify our economy.

We can talk about Ghana being a hub, but it has to translate into what we do. If infrastructure is not right, you might have the best pineapples but no way to maximize them. We need the facilities to send them to Europe and the rest of the world. New areas have to be looked at in order to diversify. We can show elements of competitive advantage. Nigeria has a population of 160 million. That is a big market. We can trade among ourselves.

When we were in Kenya, people talked a lot about the potential of the LAPSSET Corridor. Given Ghana’s strategic position and its ports, and also the mineral and hydrocarbon wealth in the region, do you see the potential for Ghana to develop its own huge integrated port and transport system?

It hasn’t happened yet because of political reasons. The message that has been sent hasn’t been good. There have been a lot of upheavals in Africa. Fortunately, that is changing, as a lot of countries have created conditions for good governance. Countries like Liberia are running open systems of government. Obviously, this is the time. Today, there have been discoveries of oil and gas in Liberia and Sierra Leone. How do we integrate this? We can create pipelines, hub systems. We must create that base that allows us to effectively participate in the exploitation of these resources.

I always look at Dubai. It became a state with a free trade area. As GSA, we have tried to get into infrastructure for the benefit of our importers and exporters. We are creating a logistics platform in Takoradi. We have acquired land already, we have started the process. We want to create a facility, to take some of the burden off the port in the provision of services for the oil and gas sector. Very soon, the energy sector is going to open up. They will need an injection of capital, and we need to build the capacities in this direction.

One of your key corporate objectives is to assist in the provision of infrastructure and also to respond to the development and technological changes in the shipping industry. What are these technological changes and how are you working to adapt to them?

If you don’t embrace technology, you’ll be left behind. It is the driving force for most economies. In times past you might have an excuse, but no longer. Nobody is sending faxes any longer. Today, you need an email address.

We are a shareholder in electronic platforms for the clearing of goods. Electronic platforms should be the basis for harnessing information, gathering data, and doing the things we do. We are looking at advanced shipment information. Ghana Revenue Authority, Customs Division, the Minister of Finance, and National Security will be able to get information for policy, planning and decision making. We have tried to introduce some technology in our work. We have a "MOBISHIP" system, which allows the importer to use a mobile phone to know if his vessel is in port. But that is not enough. We have to go further.

We consider technology very important in moving forward. That is what we are trying to do at GSA. We want to create a platform that enables the electronic exchange of information. We are putting up a 12-story building, not just an office block, but also one that deals with a number of things. We want to make it a center for things that are important for the technological enhancement of the business of trade and transport. We want to have a freight exchange so people can go on the net, access information, portals, and do exchange, placements, bookings, etc. Ship brokerage could be undertaken in that place. We want to have a maritime arbitration center. Of course, parties have to resolve their problems. Even if people are not here, we may conference them in arbitration. Those are things we are looking at for this building.

Recently the president inaugurated Africa’s biggest vehicle traffic management information system. What impact will it have on the shipping industry?

We are from the commercial standpoint. It deals more with the security situation. But it impacts on cargo units. West Africa was recently the victim of piracy. If you reduce piracy, you reduce insurance premiums and improve the reputation. It has some effects on us. It benefits importers and exporters when there is increased security at sea.

When we interviewed the president of the Chamber of Commerce he spoke about the plans for the West Africa Shipping Company. Are you supportive of this idea and what impact will it have on the industry?

ECOWAS has tried a lot of integration. Even though there have been successes, we are not there yet. From the supply side, we need infrastructure. If we have vessels that will allow us to trade among ourselves, it will be beneficial. The West Coast business for us is a good thing and very important. Trade levels are very low at the moment, but it must be looked at from the supply side. When people see the facility is available, there will be increased trade.

This year is GSA’s 40th anniversary. 80% of exports and imports in Ghana are moved by sea. Could you outline some of the GSA’s biggest milestones over these 40 years?

For me, it is not so much about trophies, but about education and information, and shedding light on the industry, making people know how important this industry is to the transformation of the economy. The GSA has brought trade to the fore in this country. There is no doubt about it. People don’t consider the importance of logistics. Over the last 40 years, what the GSA has done, which is a monumental achievement, is to bring to the fore the fact that shipping has an important role to play in our economy.

My own assessment is that the GSA has been successful in this regard. Of course, the policy formulation of the government has been on the basis of information provided by the GSA. We have a quarterly magazine which shares knowledge of various topics. We have worked with border information centers, with people providing advice and information to importers and exporters. You can’t overlook logistics. We have been voted the best Trade Facilitation Agency in West Africa. But it is not about the trophies, but what we are able to imprint in the minds of people: trade and transport are the driving forces of an economy.

I know it is not about the trophies, but you received a Lifetime Achievement Award last year. Given your distinguished career so far, what are the key priorities moving forward?

I want to see a higher level of technological penetration. I want the importer or exporter to sit in his home, or warehouse, or office, to transact business. He doesn’t have to visit the bank. I want to consolidate a number of importers to become bigger than they are now so they can leverage their strengths and compete against others in the global market. I am looking at a future in which the ports are well organized so they can tell a container’s position any time. I want to see a future in which transport is seen to play a key role in the development of the economy, and to see it more integrated than it is today. If these things are realized, I can say the future will be bright.