THE LIBERALIZATION EXPERIENCE: THE CASE OF GHANA

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THE LIBERALIZATION EXPERIENCETHE CASE OF GHANA

• A
• PRESENTATION
• BY
• CAPT. JOE BOACHIE,
• ACTING DIRECTOR-GENERAL,
• GHANA CIVIL AVIATION AUTHORITY
• AT THE SEMINAR ON AVIATION IN TRANSITION
  CHALLENGES AND OPPORTUNITIES OF LIBERALIZATION
• HELD AT ICAO HEADQUARTERS, MONTREAL, CANADA,
• 22 23 MARCH, 2003

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OUTLINE 1.
INTRODUCTION 2. EXPECTED BENEFITS 3. OPERATING
ENVIRONMENT 4. GHANAS EXPERIENCE
GAINS IMPEDIMENTS 5. CONCLUSION
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INTRODUCTION

• GOVERNMENT OF GHANA FORMULATES THE VISION 2020
  PROGRAMME IN 1995
• FLOWING FROM THIS PROGRAMME IS A GHANA TRADE AND
  INVESTMENT GATEWAY PROJECT
• STRATEGY CREATION OF LIBERALISED ENVIRONMENT TO
  PROMOTE TRADE AND INVESTMENT TO ACHIEVE
  ACCELERATED ECONOMIC DEVELOPMENT IN GHANA
• AIR TRANSPORT LIBERALIZATION ONE OF THE KEY AREAS
  IN THIS RESPECT
• THE RESPONSIBILITY OF THE AERONAUTICAL AUTHORITY
  TO IMPLEMENT AIR TRANSPORT HUB

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EXPECTED BENEFITS

• ACCESS TO NEW MARKETS
• IMPROVED EFFICIENCY OF AIR CARRIERS
• ROUTES EXTENSION WITHOUT EXPLORATORY COSTS
  THROUGH COMMERCIAL ARRANGEMENTS e.g. STRATEGIC
  ALLIANCE, CODE SHARING.
• INCREASED SAFETY AND SECURITY.
• TRADE STIMULATION
• INCREASED EARNINGS FROM TOURISM AND
• INVESTMENT OPPORTUNITY

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OPERATING ENVIRONMENT

• ABSENCE OF STRONG HOME AIRLINE
• LOW GNP PER CAPITA
• SEVEN (7) YEAR TRANSITION
• AFTERMATH OF SEPTEMBER 11TH (9/11)
• CONDITIONALITIES OF INTERNATIONAL
  ORGANIZATIONS

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GHANAS EXPERIENCE

• GAINS
• GROWTH IN THE AREAS OF
• TOURISM
• NON-TRADITIONAL EXPORTS
• AIR TRAFFIC MOVEMENTS
• PASSENGER THROUGHPUT
• HUB PROGRAMME SLOW TO ADVANCE, EVEN THOUGH
  IMPROVEMENT IN INFRASTRUCTURE AND COMMUNICATION
  FACILITIES

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GHANAS EXPERIENCE (Cont.)

• IMPEDIMENTS
• HIGH AIR FARES ON OUR ROUTES
• VISA RESTRICTIONS

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GHANAS EXPERIENCE (Cont.)

• SUBSTANTIAL OWNERSHIP AND EFFECTIVE CONTROL
• SUBSTANTIAL OWNERSHIP AND EFFECTIVE
• CONTROL CRITERIA HAS BEEN REVISED
• GOVERNMENT OF GHANAS PLACE OF
• REGISTRATION AND / OR PRINCIPAL PLACE OF
• BUSINESS
• NEW POLICY NOT READILY ACCEPTED BY
• BILATERAL PARTNERS
• DIFFICULTY IN ATTRACTING FOREIGN
  PARTNERS
• SOME BILATERAL PARTNERS PREPARED TO
  GRANT
• WAIVERS BUT THIS DISCRETIONARY PRIVILEGE
  NOT
• FULLY ACCEPTABLE

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• SELF HANDLING
• LIBERALISATION ENCOMPASSES ALL ASPECTS OF THE AIR
  TRANSPORT SERVICES INCLUDING HANDLING OF GROUND
  CARGO AND PASSENGERS
• AIRLINES EXPECT A MORE FLEXIBLE HANDLING REGIME
  THAT ENABLES THEM TO UNDERTAKE TO SELF HANDLE OR
  CONTRACT OUT TO THIRD PARTIES
• SELF-HANDLING IS A RIGHT OF THE AIRLINES TO BE
  EXERCISED UNDER A LIBERALISED SYSTEM, SUBJECT
  ONLY TO SAFETY AND SECURITY CONSTRAINTS.
• IN GHANA AS AT NOW, THERE IS ONLY ONE LICENSED
  GROUND HANDLING COMPANY.

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SELF HANDLING (Cont.)

• OUR OBJECTIONS FOUNDED ON THE FACT THAT
  PASSENGER AND CARGO THROUGHPUT AND INFRASTRUCTURE
  DID NOT SUPPORT MULTIPLICITY OF HANDLERS
• HOWEVER, GOVERNMENT OF GHANA HAS INITIATED STEPS
  TO INTRODUCE COMPETITION IN BOTH CARGO AND
  HANDLING ACTIVITIES AT THE AIRPORT

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• PRICING (TARIFFS / FARES)
• GHANAS LIBERALIZATION POLICY PERMITS AIRLINES TO
  FIX THEIR OWN TARIFFS BASED ON MARKET
  CONSIDERATIONS
• THIS REMOVES THE POWER OF GOVERNMENTS TO APPROVE
  FARES BEFORE THEY ARE IMPLEMENTED
• IN VIEW OF THE ABSENCE OF COMPETITION LAWS
  REGULATING THE CONDUCT OF CARRIERS, GHANA HAS
  INTRODUCED A SINGLE DISAPPROVAL TARIFF REGIME IN
  ITS BILATERAL AIR SERVICES AGREEMENTS
• THE RATIONALE BEHIND THIS IS THAT A COMPLAINT CAN
  BE RECEIVED FROM ANY PERSON, THE AERONAUTICAL
  AUTHORITY INTERVENES FROM THE FARE BEING
  IMPLEMENTED

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PRICING (TARIFFS / FARES) (Cont.)

• THE PARTIES WOULD BE ENCOURAGED TO ENTER INTO
  CONSULTATIONS IN ORDER TO FIND AMICABLE
  SETTLEMENT
• GHANAS POSITION IS VERY OFTEN RESISTED BY THOSE
  NATIONS WHICH FAVOUR GREATER LIBERALIZATION AND
  HAVE ADOPTED DOUBLE DISAPPROVAL REGIME
• THESE NATIONS ARGUE THAT TO ALLOW ONE PARTY TO
  INTERVENE STIFLES COMPETITION AND AMOUNTS TO
  GOVERNMENT CONTROL

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CONCLUSION IN CONCLUSION, WE BELIEVE THAT
LIBERALIZATION IS GOOD AND GHANAS EXPERIENCE HAS
BEEN BENEFICIAL / POSITIVE. RESULTS ACHIEVED SO
FAR INDICATE THAT WE ARE MOVING IN THE RIGHT
DIRECTION. BEING A SMALL NATION, HOWEVER, THE
PACE OF TRANSITION IS NOT AS FAST AS THAT OF A
DEVELOPED NATION. HENCE OUR INSISTENCE ON
CERTAIN SAFEGUARDS TO BE INSTITUTED UNTIL WE
ACHIEVE AN APPRECIABLE LEVEL OF MATURITY.