The Ministry of Finance is seeking close to €47 million in tax waivers off the €160 million financing of additional civil and dredging works as part of the Takoradi Port expansion project.

The waiver is in respect of customs duties, import tax, withholding taxes as well as inspection fees. It also includes ECOWAS Levy and the Export Development and Agriculture Investment Fund—now Exim Bank—and other project related imposts.

Parliament, on December 3, 2015, approved by resolution an additional credit facility agreement giving the go-ahead to the Ghana Ports and Harbours Authority (GPHA) to source €160 million from a syndicate of banks, with BNP Paribas Fortis NV/SA as lead arranger and lender.

The repayment period for the Buyer’s Credit Facility is 14 years, including a stipulated four-year grace period at an interest rate of 6 months Euribor, plus 2.2 percent per annum, and an annual commitment, structuring and management fee of 1.7 percent.

Works under the supplementary funding will include an additional 3.5 million cubic metres of dredging works, a 30-hectare land reclamation, the construction of an additional 600-metre quay wall, and dredging of the berth to a depth of up to 17 metres.

Chairman of the Finance Committee, James Klutse Avedzi, justified on the floor of parliament that the tax exemption will allow for the development of the port to meet current commercial demands.

He said: “Besides the urgent need for infrastructure in the wake of recent oil and gas exploits, infrastructure at the Takoradi Port have deteriorated beyond their economic service limits.

There is therefore the need to grant the waiver of taxes which is consequential to the loan facility to ensure the availability of sufficient funds for the completion of works on the project.”

Mr. Avedzi indicated that the implementation of the expansion project presents enormous economic benefits as it will create about 400 technical jobs in the construction period alone.

He said the project, when completed, will facilitate trade within the country and beyond, aside the building of an oil and gas services cluster that provides a new socio-economic platform of activities in the Takoradi metropolis.

The GPHA is working to position the Takoradi Port as an oil and gas services hub due largely to the emerging oil and gas cluster of activities, and the ongoing expansion works are geared toward opening the port to meet projected demand.

The port also offers an excellent opportunity for using the country’s corridor to capture containerised and general cargo transit to the landlocked countries of Burkina Faso, Mali and Niger, given the port proximity to the middle belt.

The port expansion project is expected to provide adequate berthing, mooring, warehousing and large open spaces at the waterfront, and deepen the berths to accommodate larger vessels.

Mr. Avedzi added: “The expansion work has the potential to substantially increase the revenue generation base of the port.”