Let's
give Government credit where it's due!
October
2, 2010
By: Henrique
Caine
The
Government of Liberia recently announced significant
policy initiatives worth noting. For those of
us in the private sector who continue to advocate
for meaningful improvement in the investment
climate, we should be pleased. The recent Executive
Order by the President suspending the import
duty on vehicles (buses and taxis) brought in
specifically for commercial public transportation,
is excellent public policy and takes the post-conflict
nation in the right direction. It means that
the Government is no longer looking to itself
as the only option in addressing the challenges
many Liberians face on a daily basis getting
around town, but it is now saying to the private
sector, "please step up to the plate and
help us address this problem." In reality,
public transportation has to be subsidized by
Government if it is to be successful, especially
where price controls are in place. Suspension
of import duty in order to stimulate investment
in the transport sector is exactly what Liberia
needs at this critical time. This is what Ghana
did to address its challenges years ago, and
as a result, today you very seldom see Ghanaians
in long queues waiting for busses or taxis,
and when you arrive at Kotoka International
Airport in Accra, no less than half a dozen
taxicabs will honk at you offering to take you
to your destination. Kudos Madam President!
Another
policy initiative that takes us in the right
direction is the decision by the Ministry of
Commerce to do away with that antiquated instrument
known as the Import Permit Declaration (IPD)
form and is no longer required for many imports
except for those that the Government actually
needs to collect data on. This is significant
because it was applied to every single item
imported including non-commercial personal household
effect. Imagine having to list your used pots
and pans on an IPD. It was simply a bureaucratic
nuisance that probably wasted the Government's
limited resources in terms of printing and administrative
costs, as well as served to unnecessarily delay
commercial importers in clearing goods. Furthermore,
issuance of an IPD has been known to be used
in the past as a basis of demanding bribes from
importers before issuance, since one could not
import without it. So the mere fact that the
Ministry is only requiring IPDs for essential
commodities is also a step in the right direction
in creating a better investment climate. Again,
much kudos to the Minister of Commerce!
A
third initiative that is also in the right policy
direction is the introduction of the Automated
System for Customs Data (ASYCUDA). This system
takes the mystery out of guessing what charges
and how import tariff are calculated and streamlines
significantly the clearing process at the port.
With ASYCUDA, the calculation is automatic.
The only issues with implementation from what
one can see are, the challenges with electricity
and the limited bandwidth due to Liberia's reliance
on satellite technology for internet service,
as both of these are essential for ASYCUDA.
Satellite internet technology has its shortcoming
during raining months. The good news is that
both electricity and national high speed internet
capability are already being addressed and we
anticipate real progress on those fronts-hopefully.
That notwithstanding, ASYCUDA is good public
policy. Again, kudos!
It
is important that we continue on the right track.
Therefore serious consideration should also
be given to the need for more than one pre-shipment
inspection company for Liberia. At present,
Liberia relies only on Bureau Veritas (BIVAC)
as the sole entity designated to conduct both
pre-shipment inspection and destination inspection
of imported goods on behalf of the Government.
This is a flawed arrangement and grants one
company full monopoly over the nation's inspection
regime. The World Trade Organization (WTO) recognizes
over twenty such inspection organizations and
there is no reason Liberia should be limited
to only one. Again, take Ghana for example,
where the port of Tema has been redeveloped
and is also serving as a transshipment port
for landlocked countries north of Ghana such
as Burkina Faso. There are six such inspection
companies operating in Ghana including the very
same BIVAC that is present in Liberia, and therefore
importers are not limited and have choices,
and unlike Liberia, can import into Ghana and
have goods inspected upon arrival without penalty.
What this means is that importers are able to
move fast and make quick business decisions
about business opportunities when importing
into Ghana. Liberia on the other hand penalizes
you 20% of the value of your cargo, insurance
and freight (CIF) as penalty for failure to
first make contact with BIVAC Monrovia for arranging
a pre-shipment inspection. So if an importer
is based in Dubai or somewhere in Asia, and
wants to import to Liberia, they have to first
contact BIVAC in Monrovia who then arranges
inspection to be carried out overseas, and if
this cannot be done before the ship departs
and the importer has to ship the goods, the
importer is penalized upon arrival of the goods.
That is a complete waste of time and results
in missed business opportunities for those who
forego and do not ship.
The
World is a global market place and international
trade has changed significantly, so it is time
to also change our antiquated unnecessarily
bureaucratic inspection scheme, open the market
to more inspection companies and not just BIVAC,
and end once and for all the penalty imposed
on importers for opting for destination inspection
when it may me more convenient for their business.
That is good public policy, and when that happens,
even more kudos will be given where it is due.
cainehenrique@hotmail.com
