THE TRANSIT TRADE - BENEFITS AND EFFECTS ON GHANA
The term "transit trade" refers to the passage of goods including unaccompanied baggage across the territory of a state between a land-locked state and the sea when the passage is a portion of a complete journey which begins or terminates within the territory of that land-locked state and which includes sea transport directly preceding or following such passage.
The issue of the transit trade has become very important as it affects landlocked countries directly. Landlocked developing countries as a group are among the poorest of developing countries, with limited capacities and dependence on a very limited number of commodities for their export earnings. Throughout the 1990s the growth rate of landlocked developing countries has been in general negative or very low.

The lack of territorial access to the sea, remoteness and isolation from world markets have contributed to their relative poverty, and lowering their effective participation in international trade. The very high transport costs, which they must bear, constrain export development since that burden limits the range of potential exports and markets in which goods can be competitively and profitably traded. The price of imports tends to soar because of high transit transport costs.

Transit Countries
It must also be noted that in most cases the transit neighbours of landlocked developing countries are themselves developing countries, often of broadly similar economic structure and beset by similar scarcities of resources. Transit developing countries are also in need of improvement of technical and administrative arrangements in their transport and customs systems to which their landlocked neighbours are expected to link.

It is however to be noted that an efficient transport and customs system that link the transit countries to their landlocked neighbours hold benefits and effect for the transit country. Efficient transit transport systems can be established through genuine partnerships between landlocked and transit developing countries.

Transit Trade in Ghana
It is in this vein that Ghana has for some time now been collaborating with her landlocked neighbours of Burkina Faso, Mali and Niger for the development and use of the Ghana corridor. Due to its numerous benefits to the transit countries many of these countries are competing for the landlocked country cargoes. Countries such as Cote d’Ivoire, Ghana, Togo, Benin and Senegal are presently competing for the same transit cargoes of Burkina Faso, Niger and Mali.

Therefore, for the purpose of attracting transit goods to and from the landlocked countries many agencies in Ghana have made efforts at collaborating with their counterparts or similar agencies in the landlocked countries. Notable among these is the signing of Memoranda of Understanding (MOUs) between the Ghana Shippers’ Authority and her counterpart Shippers’ Councils of Burkina Faso, Niger and Mali in 1998, 2000 and 2003 respectively.

The Shippers’ Councils in their MOUs agreed inter alia to:
• Offer mutual assistance to shippers in the transport chain
• Exchange relevant information in the area of international trade.
• Conduct joint studies and research into areas of relevance in the transit business.
• Institute effective systems to monitor movement of cargo throughout the Ghana corridor
• Participate in the continuous simplification and harmonization of customs procedures pertaining to the transit and cross border trade
• Generally work toward the free flow of traffic between Ghana and the transiting countries.

Ever since these intervention efforts, the transit trade volume on the Ghana corridor has increased from 108,000 tonnes in 1999 to 705,000 tonnes in 2006. However, if this trend is to continue, a lot more effort needs to be put in not only attracting more transit trade but maintaining shippers of the landlocked countries who are presently using the corridor.

In this regard the Ghana Ports and Harbours Authority (GPHA) has been organising trade and marketing tours of the landlocked countries to win more clients for the ports. In the same vein the Ghana Shippers’ Authority has embarked on the review of its MOU with her counterparts in Burkina Faso, Niger and Mali in a bid to inject a renewed vigour in the use of the Ghana corridor.

Other aspects of the involvement of Ghana Shippers’ Authority in the transit trade are the following:

• The Authority has been the focal point for the West Africa Trade Hub (WATH) research project sponsored by USAID. This project deals with effort to curb bribery and driver harassment, inter alia on the Ghana corridor to the Sahelian states, especially Burkina Faso.

• The Authority has championed the use of the sealed Grid System (SGS). The SGS involves the use of sealed grids fixed on appropriately loaded haulage trucks to ensure a secure and safe passage of transit cargo. The Authority had earlier hosted an exhibition of the SGS at Tema for Burkinabe, Ghanaian, Malian and Nigerian transistors.

• The Authority is a prominent member of the Ghana-Burkina Faso National Transit Corridor Monitoring Group-set up by the Ministry of Foreign Affairs Regional Co-operation and NEPAD.

• The Authority continues to provide support to the Representatives of the shippers’ councils of the landlocked countries in Ghana.

Benefits
A major beneficiary of the increased use of the Ghana corridor by the landlocked countries is the Ghana Ports and Harbours Authority and by extension, the government of Ghana. Transit cargoes have added to the cargo throughput at the port thus increasing the revenue of the GPHA.

Investment opportunities have arisen. For instance, the coming on stream of a dedicated container terminal, freight parts and car parks by the Ghana Harbours Authority as well as the private sector are a result of increased cargo volumes at the ports.

Another group of beneficiaries of the transit trade is the warehouse and other storage facility operators. The incidence of transit trade has increased the demand for warehouses in and around the seaports because transitors need a lot of time to organize the transportation of their cargoes to the consignees in the landlocked states. The storage facilities at the ports therefore are a convenience and they provide that breather.

Arising out of the transit trade is the creation of a Unit within the State Insurance Company (SIC) to handle their insurance needs of the transiting vehicles. The SIC which is the National Guarantor in the transit trade for Ghana covers the liability of truckers throughout their journey on the Ghana corridor by way of insurance policy. This is additional income for the national insurer.

The banks have also continued to act as conduits for the transfer of funds for payments for all transactions by the transitors. This has also given impetus to intra-West African banking in the general context of ECOWAS integration.

A major consideration for the establishment of the Inland Port in Boankra near Kumasi is the increasing transit trade on the corridor. Almost all the transit trade cargo to or from the seaports of Ghana go through Kumasi. The development of the Inland Port and its ancillary activities would be of great benefit to the country.
Additionally, commercial transit parking lots have sprung up for the convenience of trackers.

Other new opportunities for service include the setting up of agent offices by the Driver and Vehicle Licensing Authority to monitor axle load conforming to specific standards.

There is also an increased haulage and freight forwarding activities as a result of the transit trade. Due to the good condition of most Ghanaian trucks, they most often benefit from contracts to transport the transit cargoes over long distances into Burkina Faso, Niger and Mali.

Effects of the Transit Trade
Among the effects of the usage of the Ghana corridor by the landlocked countries includes the following:
Heavy trucks plying the roads have the tendency damage the roads if no strict axle load limit regime is applied. The tendency for oil spillage in the event of breakdowns cannot be ruled out. These also have a damaging effect on the roads.

There are occasional instances of port congestion due to increased activities at the ports in which the contribution of the transit cargoes cannot be ruled out. These tend to put pressure on equipment and infrastructure.

Issues of transmission of diseases, especially sexually transmitted ones, through promiscuous behaviour by operators such as drivers and their mates have also resulted. This also goes for narcotic, psychotropic substances and human trafficking.

Challenges
In spite of the efforts at promoting the transit trade a number of challenges still exist. If these challenges are no addressed Ghana could lose the transit trade cargoes and its attendant benefits to neighbouring transit countries, especially Cote d’Ivoire and Togo.

There is lack of uniformity in subscribing to and applying international and regional instruments. Again improper coordination between some of the agencies involved in the transit trade has also contributed a major shortcoming of the Ghana corridor.

Since transit cargo is a non-custom revenue cargo, customs officials are gradually getting used to its processes as a mere trade facilitation activity.

It is generally estimated that, world wide, five percent or more of gross domestic products (GDP) is lost due to inefficient border procedures. This also affects the Ghana corridor in relation to her neighbouring landlocked countries due to the numerous administrative bottlenecks at the barriers and borders.

Conclusion
Given the problems that were encountered during the developmental stages of the transit trade in Ghana, one can confidently say that tremendous progress has been made.

The development of the Ghana corridor can only be sustained through the development of infrastructure such as new roads, new bridges, construction of new facilities such as inland ports facilities, construction of strategically placed freight parks and warehousing facilities, and the elimination of burdensome border crossing procedures, and simplification of complex documentation and procedures at ports.