NPA Ends Demurrage – Several New Measures Could Improve Business Climate, Spur Growth

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    Effective April 1, 2019, importers will no longer be charged demurrage, Bill Twehway, the Managing Director of the National Port Authority said Saturday in the capital Monrovia.

    Demurrage is 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. 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, the NPA Chief announced, indicating 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” Twehway said.

    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 Pro-Poor Agenda for Prosperity and Development (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, officials have confirmed.

    Since the launched of the Business Climate Working Group by President Weah, Liberians are beginning to see practical steps in improving the business climate in Liberia. The World Bank Doing Business Report ranks Liberia 174 out of 190 developed and developing economies, meaning that the country has a low score in the World Bank ease of doing business 10 indicators.

    The desire to improve the country’s ranking in the ease of doing business has taken more actionable dimension, especially from the Chair of the Business Climate Working Group, Samuel Tweah Jr.

    With mandate from the President to explore emerging challenges and opportunities for creating a business-friendly environment, the Ministry of Finance and Development Planning has been holding series of high level and technical meetings with key actors in both the public and private sector.

    “The manifestation of the political way by the President and the availability of technical expertise there should be no reason why efforts cannot be made to achieve success in the business climate in this country,” Finance Minister Samuel Tweah said.

    In spite of the financial challenges, some of the affected agencies of government have made some modest and significant progress in improving the business climate.

    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 tax burden 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 (Import Permit Declaration) or EPD (Export Permit Declaration).

    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 steps are underway to have a one-stop shop which will fast track the business process.