Players in international and maritime trade are advising a tripartite committee involving the National Insurance Commission, Customs Division of the Ghana Revenue Authority and Ghana Shippers’ Authority to tread cautiously in seeking the enforcement of the law that mandates importers to purchase Ghanaian Insurance Policies for all imported cargo except personal effects.
Speaking on Eye on Port, President of the Ghana Union of Traders Association, Dr. Joseph Obeng, said the law leaves much to be desired and in order to provide a win-win situation for traders and local insurance companies, the trading public has to be thoroughly engaged and obtain inputs for parliament to make the necessary amendments before enforcement of the law in question.
“The law has already been enacted, but what we are asking is that, we sit down again, to make some inputs so it can be workable, because as it stands it isn’t. It is structured only to benefit the local insurance companies, where our interest is not captured,” he said.
According to the President of GUTA, marine insurance is a service provision by the insurance companies and can therefore not be imposed on businesses through legislation.
He said while the trading community supports the campaign to grow local insurance companies, they disapprove of the method being adopted.
“We don’t have any problem when local industries are enhanced but this is services, and services should not be imposed,” he argued.
The GUTA President explained that over 80% of goods imported into the country are insured by suppliers from origin because most of it are acquired on credit, making it incumbent upon supplier to purchase insurance cover because they bear the most risk.
“We do not have custody of goods until they have arrived to our destination and we have paid all our debts to suppliers. In this regard, our suppliers are very much involved in the documentation process and they seek to protect the worth of their goods.”
According to him, because of such business dynamics, a lot of work has to go into convincing suppliers to cede insurance responsibilities to buyers especially where goods are being purchased on credit.
On his part, Chairman of the Commission on Trade Facilitation at the ICC-Ghana, Joseph Agbaga explained further the trading dynamics that lead to suppliers having more insurable interest in imported cargo.
“If my seller is giving me, the buyer goods on credit for 180 days, even though I have paid the duty, his insurable interest in the goods is still paramount. Because if I do not pay him, it means he is at a loss.”
Joseph Agbaga advised that the focus of local insurance companies should be to explore effective means of courting importers to negotiate with their suppliers to relinquish the insurance component of transactions to buyers, who can then procure local insurance rather than make it mandatory.
“They must assure the trading public that they are going to solidly stand by them so that they would also have that cushioning effect to go back to their suppliers to express the desire to let Ghana partake in the insurance component of the international trade,” he articulated.