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OTAL Services > Customer Literature > Newsletters West
African Links - May 04 Focus on Gambia - Economic Development Historically Gambia is predominantly an agrarian economy, services emerged in the early 1990s followed by tourism as the fastest growing subsector and acts as the largest gross earner of foreign exchange. Distribution services are also significant, reflecting Gambia's traditional role as a hub for re-exports to countries in the sub-region. This role has been encouraged by geographic factors; the implementation by Gambia of lower tariffs and more flexible exchange rate policies compared with neighbouring countries of the West African Monetary Union; permeable borders and underdeveloped capacity of the customs administration in both Gambia and neighbouring countries. As a small open economy, the Gambia's neighbours, Senegal, Guinea Bissau, Mali, have an important impact upon the trade system. Due to its dependence on imported goods, the government instituted a tariff policy favourable to imports. While sales and duty taxes represent 15%, it is half of what neighbouring French speaking countries are imposing. As a result, Banjul became a port of import and re-export. The re-exportation of merchandise through Banjul constitutes a major segment of economic activity. The Gambia's market is essentially free, meaning no import licensing, no foreign exchange limitations, rapid clearing of imports from the port, and little port corruption. The government is currently revisiting its policy of financing recurring expenditure through taxes on international trade. More liberal trade rules should remove distortions in the import regime and enhance its transparency. This would in turn encourage more competitive production of goods and services not only for export but also for the domestic market. Among the specific measures to be taken, the tariff structure could be rationalised - in particular tariff disparities should be eliminated. A flexible exchange rate policy is needed in order to promote domestic competition and enhance the export base. Customs administration needs to be made more efficient in order to reduce transaction costs, boost investors' confidence and increase customs revenue. Recently the government has implemented a series of measures to give both local and foreign businesses confidence that they can realise attractive returns on their investments. For example, tariff rates on imports, already the lowest in the region, have been further reduced from a maximum of 20% to 18%. In ensure a liberal-trading environment. This last is necessary to integrate the domestic economy fully into the global economic system. The World Bank has also been working with the government to implement the "Gateway Project," in order to transform Gambia into a major gateway to the West African coast. By improving its ports and airports, it would be designated as a free zone to facilitate export-related manufacturing and other activities. Significant concessions are expected to be given to companies sitting in the free zones, including a ten year tax holiday, exemption from customs duties and other fees for intermediate goods, supplies for manufacturing and capital equipment. The Gambia Gateway Project intends to enable Gambia to establish itself as a globally competitive export and processing centre. The project is a key component of the Government's strategy for achieving broad-based, export-oriented, and sustained growth. The project will be implemented in two phases. The first phase, using an Adaptable Program Lending (APL) instrument consists of five components. The first establishes the physical infrastructure needed for an operational Free Zone at the airport. It includes common users facilities and utilities and consulting services for supervising works. The second component establishes the Investment Promotion and Free Zone Agency (GIPFZA) as a self-sustaining entity that manages the free zones and promotes trade and investment. It includes operational support, technical assistance, and consulting services. The third and fourth provides technical assistance for the Gambia Divestiture Agency and finances training including quality management and control processes, the ISO certification concept, and information about US and European markets' access regulations. Finally the fifth component funds for overall project management. The Gambia was recently added to the list of African countries eligible for tariff preference under the American Africa Growth and Opportunity Act (AGOA). US law requires that African countries make continued progress towards a market-based economy, free trade, economic policies. Thirty-six African countries including Gambia have benefited from AGOA since it was launched in 2000. The initiative offers accredited countries lower customs duties on textiles and clothing exports to the United States. It also encourages multinational corporations to invest in Gambia.
Banjul Port - Maintaining a Competitive Edge The Gambia Ports Authority has enjoyed healthy profits for several years, and in 1993 initiated a project to extend Banjul port's handling capacity from four to seven vessels. This modernisation program and improvement of the port infrastructure, port operations and cargo handling techniques was developed under the first and second Banjul port project (Banjul I and II). Under Banjul III a defined clear-cut strategy envisages the port as a key distribution and transhipment hub for the West African sub-region. A catalyst for economic development based on political stability and a genuinely liberalised economy. Cargo operators in the region have already recognised Banjul as an efficient and cost-effective port, where container handling is substantially lower than elsewhere in the region and bureaucratic bottlenecks are negligible. Banjul III aims to upgrade the ports facilities over a five year period at a cost of around US$35 million, to be funded jointly by the Gambian Port Authority (GPA) and a number of international financing agencies including the World Bank. The main objective is to safeguard the international competitiveness by providing adequate facilities for containerised traffic and expanding quay space to cope with growing volumes. It will also establish warehousing and other entrepot storage facilities to operate as regional distribution centres servicing the West African market. The port currently handles a combination of containers, bulk and break-bulk cargoes, including imports of 18,500 TEU, 103,000mt of petroleum products, 3,000 vehicles and 96,000mt of bulk cement in 2001. Exports through the port are much lower with groundnuts and groundnut products (including peanut oil in bulk) being the major exports. OTAL serves Banjul on a weekly basis. This container service operates two 400 TEU vessels via Dakar calling at Banjul (Gambia), Nouakchott (Mauritania), Las Palmas (Canary Islands) and Casablanca (Morocco). This service meets the weekly fixed day 'Hebdo Service' in Dakar. OTAL agency office:
The port quay has a total length of 750m, 38,000m2 of uncovered area, and a covered storage area of 3,000m2. The draft is between 8.5 and 10m, depending on the tide. The port is actually capable of handling up to 1.5 million tons of cargo annually. The daily discharging capacity of Banjul port is more than 1,000mts. Handling capacity at the port of Banjul is estimated at 1,000 to 1,200 mt/day. Pilferage at the port is not of concern neither is security and there is no congestion at the port. There are also three bonded warehouses (two rented to a groundnut-processing unit). It should be noted that importers have their own warehouses and there is no need to store food commodities at the port. Also, private warehouses are available for rent outside the port. For storage outside the port, the capacity consists of private storage that can be rented if necessary. CRS has three warehouses, which can accommodate up to 50,000 bags or 2,500mt. The World Food Program (WFP) has storage capacity of up to 10,000mt. Sufficient transport capacity exists within the country to move monetised commodities throughout the country and supply various geographic markets. Since the early 1990s a tarred road has been constructed, running along the south side of the Gambia River from Banjul to Basse Santa Su, but it is in a poor state of repair. However ongoing projects include: the tarring of the road linking
Barra to Kerewan along the northern side of the river (a scheme part-funded
by Taiwan); a feasibility study for a road from Farafenye to Kauur
further east; and the completion of the Kombo roads linking the sea
coast (where most tourist hotels are situated) with the Yundum International
Airport further east and Kartong in the south. To view OTAL's port profile providing details on port equipment
and information on pre-shipment inspection procedures please view
http://www.otal.com/gambia/index.htm Trade Partners - Figures in US$m
Instability in Côte d'Ivoire has enabled Ghana to promote itself as a regional trade hub and has also broken down some of the barriers in traditionally divided West Africa. Where once the Francophone, landlocked states of the Sahel tended to look to Côte d'Ivoire for trade because of its developed infrastructure, port facilities and position as the largest Francophone economy in the region, they have now partially turned to Ghana. The 1999 coup and the subsequent four years of unrest have seriously undermined the Ivorian position. While ports in Francophone Togo and Senegal have also benefited from increased trade, the Ghanaian port of Tema has been overwhelmed by demand from traders importing to or exporting from Burkina Faso, Mali and even Niger. The GPHA recently opened an office in Ouagadougou to serve as a link between the authority and customers in this landlocked region. Although the Ivorian civil war seems to have come to an end, the volume of foreign goods passing through Tema continues to rise and has now increased by over 800% since the end of 1999. The biggest surge in demand occurred in 2002, leading to severe delays at the port. However cargo processing has now been speeded up to ease congestion. Under the new system, the contents of groupage containers, containers shared by more than one trader, are now divided up outside the main port area. A longer-term solution has also been put in put in place and work has begun on improving capacity and facilities at Tema. The port has been dredged to enable larger ships to dock, a new container terminal is being built and a quay is being extended. In addition, passenger and goods rail fares to the port are to be subsidised following improvement to the Ghanaian rail network. In April 2003 work commenced on the extension at the port of Tema estimated to be worth US$60m. Interbenton a Dutch construction company will redevelop Quay 2 of the container terminal (recently dredged to 11.5m, US$21m) and provide for additional storage and berthing facilities for modern bigger vessels. The project is scheduled for completion in 2005 and is being financed by the Government of the Netherlands on a BOT basis. There is also to be simultaneous development of Takoradi port assisted by the Japanese Government. US$11m has been set aside for dredging work. Elsewhere in the Ghanaian port sector, two Dutch firms - logistics outfit Unicontrol Holding BV and stevedoring specialists Messrs Van Dijke - have set up a joint venture to improve turnaround times for bulk carriers using the port of Takoradi. A barge loading system is being introduced for the loading and unloading of bauxite, cocoa, coffee and timber. New berths are to be constructed at a cost of US$250m, partly with the support of Japan International Corporation Agency (JICA). The Japanese agency may also support development plans at Tema. Also in response to increased demand, the government is to construct a new inland port at Boankra, near Kumasi, at the junction of the country's existing road and rail links. It is hoped that the new port can attract lucrative business from the cotton industry in the Sahelian states. In the longer term, however, a much bigger expansion programme is required if Ghana is to compete with Abidjan, if and when peace returns to Côte d'Ivoire. Once construction work is completed on expanding Tema, it will still only have berthing capacity for 17 ships, in comparison with Abidjan's 70, while the Ivorian port also has faster turnaround times. Moreover, despite recent improvements to the rail network, Ghana's road and rail links with the north remain poor.
OTAL serves Tema using its direct container service operating five vessels, all new-buildings, each with a capacity of 1500 TEU. This weekly container service calls at seven West African ports on a fixed day basis offering fast transit times from the port of Felixstowe and Antwerp to Tema in only 17 and 18 days respectively. OTAL agency office:
Ghana Rail & Road Network - Parliament Loans and Private Public Partnership (PPP) President Kufours administration has made a strong commitment to bolstering the road and rail network in order to enhance the country's overall competitiveness. Much of the road network is over 100 years old a legacy of the colonial days but that is changing. Ghana and Japan have recently signed an agreement for US$83m grant for the construction of the Accra-Cape Coast road with work already well underway. By turning to the private sector for help the government wants to attract investment into infrastructure development through public-private sector partnerships (PPP's), such as build, operate, and transfer schemes (BOT). The Ghanaian Parliament has recently approved a US$300m loan for the financing of projects under the President's Special Initiatives (PSI) and the road, transport and railways sectors. The agreement is between the government and CNT Group Holdings limited and the CNT Construction Investment Limited, a construction and investment financing company in the United Kingdom. The credit covers the rehabilitation of the Eastern Rail Line, road works involving the upgrading of the Achimota-Kumasi road. The development of the Eastern Rail line will enhance the Ghana Railway Company's capacity to haul cement, cocoa, flour and petroleum products from Tema to Kumasi and also improve the sub-urban rail systems between Accra-Tema and Accra-Nsawam. A portion of the credit facility will also go to the Accra-Kumasi road project, aiming at constructing a two-lane dual carriageway to provide better services for travellers. Other Road Projects
Mali Endorses Road Links
with Burkina Faso & Ghana OTAL offers a CTBL service to Mali as follows:
Guinea: Port of Conakry Project III The "eastern zone" component, through the creation of an industrial and storage zone of 40ha, aims to meet the growing demand expressed by both the Government and Malian operators. In 2003, 4,730,000t of cargo have passed through the Conakry port. During 2004, the Kankan-Kouremalen-Bamako road will be completed placing Conakry 950km from Bamako. The firm in charge of the detailed pre-project survey and works supervision will be selected soon. The doubling works of the terminal container will be awarded following an invitation to tender with prequalifying, expected for the last quarter of 2004. Around the same period, an invitation to tender will also be made for the construction of a lorry parking.
Guinea Roads
In a bid to expand their economic bases, Ondo and Ogun state governments are planning to establish a free export processing zone in the boarder town of Olokola in Ilaje Local Government Area of Ondo State. Already, over 10,000ha of land have been acquired for the first phase of the project and would be commissioned before the end of the year 2007. The joint venture will be private sector-driven in order to expand the economic bases of the states and that of Nigeria. The West has Lagos, while the East has Warri, Port Harcourt, Calabar and Onne. Due to increased oil exploration off shore, Olokola is well placed over existing port areas, with a large expanse of land for expansion and is near the headquarters of oil companies in Lagos. Douala Customer Party Trading Briefs
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