Middle East War: GUTA “prays” for ceasefire as conflict pushes logistics costs up

The Ghana Union of Traders Association (GUTA), is banking all hope of resuming normal imports on an early ceasefire to the war in the Middle East war, warning that a prolonged conflict could harm their “already-squeezed import margins.”

According to the Association, government is yet to fulfill its promise to streamline the country’s port duty regime, adding that the new surge in freight costs as a result of the ongoing war, is “killing” their operations.

Speaking on Joy News’ PM Express on Thursday, GUTA President Clement Boateng revealed that the trading sector is becoming increasingly anxious as the war has already impacted logistics and could impact access to credit.

“As business owners, we are praying the war comes to an end soon. Otherwise, it will create a problem in terms of global commodity and logistics. Assuming you’ve gone for a facility from the bank, it will definitely have a negative impact on you,” he said.

The GUTA President explained that although the war has been going on for just a week, its impact on the global supply chain has been felt around the world.

“The global supply chain is very sensitive to Middle East instability. Shipping costs shot up during the Covid-19 era and again during the Red Sea disruptions 2023. Insurance premiums for cargo passing through areas that these conflicts are happening rise, and when they go up, those costs are passed directly along the supply chain and eventually Ghanaian consumers will have to bear it,” he warned.

Clement Boateng further noted that apart from the threat posed by the ongoing war, GUTA’s persistent calls for a reform of Ghana’s port levy structure has not yielded any result.

He revealed that the Association has repeatedly flagged 22 separate duties, levies, and taxes at the ports, noting that these levies and taxes make importing through Ghanaian ports more expensive than clearing through other regional ports such as Lomé and Abidjan.

“Business owners are not competitive because of the numerous bottlenecks in tax administration at the ports…We want the government to reduce the cost of doing business,” he previously stated.