Friday, December 9

GPA blames high cost of commodities on coronavirus

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The Gambia Ports Authority (GPA) has said in a news release that the major causes of the high cost of basic commodities are attributable to external factors, adding it’s beyond the control of the government. According to GPA, findings have revealed that the impact of the coronavirus pandemic, disrupted global supply chains resulting in high freight cost.

The release reads:

It has come to the notice of the GPA Management through media reports about statements uttered by both public servants and private individuals during the recently held Private Sector Stakeholder Engagement with GCCI, purporting that the Port of Banjul is responsible for the added cost of doing business in The Gambia and the resultant increase in the prices of basic commodities.

However, the GPA Management wishes to inform all those concerned that the Port Handling Charges have been reduced by more than 55% since 2013, as twenty feet and forty feet containers are only charged D750 and D1,500 respectively. Where demurrage charges are liable to be paid due to delay in clearing cargo or congestion at the Port terminals, concessions continue to be accorded for demurrage charges, particularly for essential commodities such as food items. These demurrage charges are fixed at a maximum of D23,000 for 20ft and D46,000 for 40ft containers, irrespective of the length of stay.

Generally, the major causes of the high cost of basic commodities are attributable to external factors, which are beyond the control of Government. Findings have revealed that the impact of the coronavirus pandemic, has disrupted global supply chains resulting in high freight cost. It is established that, for example, the freight cost to Banjul has increased by over 100% since November 2020 from an average USD2, 750 per 20ft Container to USD 5,750.

The downward scale in global production level has caused high prices of essential commodities in the international market, which have been surging since April 2020. The price of oil, which is a determinant factor on commodity prices, continued to rise from the slump in mid-2020. The Price of a barrel of Brent Crude was USD 42.3 as at November 2020 and it increased to USD 63.8 by April 2021, representing an increase of 50.83%.

The Gambia being a net importer of food like many other developing countries continues to feel these impacts in the domestic market in a form of price hikes because of these externalities.

It is still worthy of note that despite the external factors on the domestic price of commodities, some of the internal factors may exacerbate the situation. These include demurrage charges levied on importers by shipping lines as a result of the congestion at the Port; the reintroduction of 20% reduction of the indicative values by the Gambia Revenue Authority [GRA]; the registration fees of Food Safety and Quality Assurance (FSQA) by food establishments; some of the local fees charged by shipping lines; increases in the freight levy charged by Gambia Maritime Administration, among others.

Despite the fact that most of these actors operate within the maritime domain, it is usually a misconception that it is the Port that is responsible for all the increases in the cost of business transactions. Notwithstanding, the GPA continues to implement efficiency improvement measures to address the increased demand on the Port facility due to the growth in volume over the past 4 years, which is the major cause of the congestion.

These are interim measures to alleviate the situation, while public tender is expected to be completed by the end of the year to secure a private partner to invest in the port expansion project to increase capacity. The main components of this project are the expansion of the jetty, construction of new container terminal and implementation of digitalisation in operations. Government is according the necessary support for the realisation of the project development needs of the Port to enhance its potential to sustain and improve productivity and facilitate trade to reduce the cost of doing business.

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