Exporting from the UK to Ghana: Essential Steps and Key Considerations
Posted May 26th 2024
Ghana presents a great opportunity for market expansion into the sub-Saharan Africa, as the country seeks to be The Gateway to Africa. Market expansion which involves the sale of goods will undoubtedly come with the movement of goods into Ghana. With this article, we will attempt to focus on the process of shipping goods from the United Kingdom (UK) to Ghana and provide a first-hand experience of the process.
Exports from the UK are mainly made up of finished goods and to a larger extent, machinery for various industries. The perceived high-quality of UK products makes Ghana a desired market for most UK companies, not the mention the historical ties enjoyed by both countries.
From a product point of view, moving large volumes of goods would is done via sea freight as the most efficient and cost-effective mode of transportation. Some time-critical and high-value goods are moved on air freight services, though this tends to be in limited quantities, due to the cost involved.
The process of exporting from the UK to Ghana starts with identifying a freight forwarder with extensive knowledge of the Ghanaian market and deep expertise within UK-Ghana exports. Once a freight forwarder has been identified, they would be in a better position to advise on the mode of transport to use, which would depend on several factors such as the total consignment volume, costs and any deadlines to meet.
A freight forwarder would request for shipment documents which would include packing lists, commercial/export invoice(s), material safety data sheet (for dangerous goods) and any other customs documents, if goods are under a customs bond.
Once the required documents have been handed over to the freight forwarder, they would proceed to book the consignment on the agreed mode of transport, be it ocean or air freight. Freight forwarders would also assist in clearing export customs for shippers, as an value-add service, though not all freight forwarders provide this service. Freight rates are a significant expense and may exceed the value of the consignment. Typically, ocean freight is recommended for voluminous goods as this tends to be the most cost-effective mode of transportation, without depleting profit margins.
For all consignments, we recommend appropriate marine insurance in place, in the unlikely event of theft, damages and other unforeseen circumstances. Most UK freight forwarders who are members of the British International Freight Association (BIFA) would have trading conditions which exclude or limit their liability. We strongly advise against relying on freight forwarders insurance policies, due to the limits of liability in these trading conditions. Instead, we advocate separate marine cargo insurance for all shipments for peace of mind, security and business continuity.
For shipments terminating in Ghana, local regulations require insurance to be procured locally hence, most UK insurers are unable to insure goods terminating in Ghana (and several other African countries). At Manc Global Logistics, our existing relationships with local insurance providers ensures that we are able to insure consignments terminating in Ghana, as required by local regulations.
With goods cleared through export customs and with the necessary documents in hand, the consignment is now ready to be loaded onto the designated vessel or cargo plane.
Consignment documents such as sea waybill, bill of lading, airway bill (house or master) would be provided by the freight forwarder, if they are authorised to issue such documents. In other instances, these would be issued by the shipping/airlines themselves.
For each shipment, the freight forwarder would have provided the departure time and Estimated Time of Arrival (ETA) at destination. Knowing the transit time from the loading port to Ghana is vital for planning and cost management. The ETA typically has a margin of +/- 4 days on average hence awareness of the ETA helps you prepare your team to clear and take possession of the consignment in an efficient manner.
With the export in progress, import procedures kick-in a few days to the consignment arriving in Ghana. For air freight, import procedures can be started within a few day prior to goods arriving to the country, though it's standard practice to await the physical arrival of the consignment to begin import procedures. For ocean freight, the process begins with about a week to go before vessel arrival.
Import procedures begin with the presentation of shipment documents to the various authorities for verification and payment of required charges. On the Ghana side, import charges are levied by the following authorities:
1. Ghana Food and Drugs Authority (FDA)
2. Port Health Authority (PHA)
3. Ghana Revenue Authority (GRA) - Customs Division
4. National Security (in exceptional circumstances)
5. Ghana Standards Board (GSB)
6. Energy Commission
Import Duties and Taxes in Ghana.
Import duties in Ghana are calculated on the Cost, Insurance and Freight (CIF) value of goods. As an example, a consignment with a value of £1,000 and insurance premium of £20 and freight of £2,000 for a 20ft container will have the imported calculated on £3,020 (£1,000 + £20 + £2,000) hence higher value shipments tend to have higher import duties and levies.
Duties and taxes on imports into Ghana can be estimated by visiting the Integrated Customs Management System (ICUMS) of the Customs Division of GRA. Accurately estimating duties and taxes based of the correct HS (harmonised system) codes is crucial, as this accounts for over 40% of the total cost of clearing goods at the various ports. Engaging a professional customs broker is highly recommended, as they are able to navigate the complex import regimes and port charges which includes local port handling charges, shipping line charges, duties, VAT, fees and levies. A customs broker would be able to provide a quote for your shipment, which helps provide a clear estimate of the total cost of clearing your consignment from the port. With over twenty import charges and various levies on imported goods, the use of a customs broker cannot be underestimated. The GRA requires all customs brokers to be registered hence confirmation of a customs broker being registered should be requested, prior to handing over consignments.
For licensed goods, ensure you have the required import permit(s) to avoid delay and other legal issues. Import regulations in Ghana is handled by the various agencies outlined above hence permits and licenses may be required from these agencies, prior to goods arriving into the country. We highly recommend working with the authorities involved in identifying whether permits and licenses are required for your goods, prior to importing into the country.
Managing Free Days at the Port of Tema and Takoradi.
Like most ports, space is at a premium hence the number of days containers can be stored at the port without incurring additional costs, known as "Free Days" is essential in minimising your total cost of import.
Understanding the number of free days allotted to your shipment is critical as this helps to avoid demurrage (storage) charges. Most containers are assigned a minimum of 7 free days, with the maximum we've seen in our operations being 21 days, however, this is at the discretion of the shipping line and may or may not be adhered to locally.
The number of free days allocated to a shipment is typically stated on the bill of lading and shippers should bear this in mind, in conjunction with the ETA of the shipment to avoid unnecessary costs.
Local Port Handling Capabilities at Tema and Takoradi.
For most containerised shipments, there would be no issue with port handling, as there are modern equipment in place at the old port (Jubilee) and the new port (Meridian Port Services, MPS) to handle containers on all vessel sizes.
The issue of port handling capabilities comes to light in project cargo, where large, heavy and bulky machinery and equipment are imported into the country. This is sometimes a challenge for the oil & gas, as well as mining industry who require meticulous planning to their machinery and equipment imports into Ghana are handled appropriately and no damages. Working with local port authorities would ensure that they are well prepared to ensure a successful import of heavy machinery and equipment for these industries.
By considering these factors and working with an experienced freight forwarder, you can streamline your import process to reduce costs and avoid potential pitfalls in exporting/importing to Ghana. Thorough planning and preparation are crucial to ensuring the successful arrival and clearance of your shipment in Ghana. At Manc Global Logistics, we have over two decades of experience helping businesses of all sizes navigate the complexities involved in market expansion to Ghana. Our firs-hand experience of the process makes us a trusted partner for UK companies with a sight on export trade to Ghana.
As BIFA members, we are the preferred freight forwarder of choice for UK-Ghana exports. Speak to us today to learn more about how Manc Global Logistics can assist with your export adventures to Ghana.