The government reiterates its commitment to pursue export diversification which seeks to strengthen the exportation of other export commodities aside traditional export products.
According to the Ministry of Finance, government is coordinating efforts to reach a target of US$25 billion in Non-Traditional Exports (NTEs) by 2022.
Finance Minister, Ken Ofori-Atta indicated that the target is in line with the National Export Development Strategy (NEDS) which the Ghana Export Promotion Authority (GEPA) coordinates.
…A National Export Development Strategy (NEDS)… was also launched with a target of achieving US$25 billion in non-traditional exports by the year 2022”.
Ken Ofori-Atta
To achieve this target, the Minister noted that the government has selected a number of value-added products and commodities. The aim is to enhance production and export to key markets around the world.
Potential of Trade Agreements
As such, Mr. Ofori-Atta stated that the trade agreement that Ghana has signed with other countries and international bodies will help meet the target. He noted that the new Ghana-UK Interim Trade Partnership Agreement will ensure trade continuity between Ghana and the UK.
Under this Agreement, Ghana enjoys duty free, quota free on its exports to the UK market. It also provides tariff preferences for 80 percent of goods exported from the UK into the Ghanaian market.
Moreover, Mr. Ofori-Atta also expects Ghana to leverage the Interim EU-Ghana Economic Partnership Agreement (iEPA) to boost its NTEs.
The iEPA which commenced on July 1, 2021 guarantees duty-free, quota-free access to the EU market for products made in Ghana. Meanwhile, 80 percent of the total volume of EU exports will enter the Ghanaian market with tariff preferences.
“The removal of tariffs on intermediary goods and machinery imported from the EU under the iEPA will lead to cheaper inputs for production in Ghana. This will make locally produced goods more competitive and support industrial development and the country’s integration into global value chain”.
Ken Ofori-Atta
Diversification of the country’s exports will serve as a buffer for the country’s export earnings. This is because price fluctuations in the global market significantly affect the country’s exports.
Aside the need for value addition, the government must ensure full implementation of existing strategies on the promotion of NTEs.
Non-Traditional Export sector
The Non-Traditional Export sector is categorized into three main sub-sectors: Agriculture, Processed/Semi-Processed, and Industrial Art & Craft sub-sectors.
Services export is added as the fourth pillar. However, the GEPA indicated that data from the services sector is yet to be included in the NTEs annual stats reporting. Available data points to a gradual improvement in the NTEs sector.
Currently, the country’s NTEs earnings increased from $2.813 billion in 2018 to $2.899 billion in 2019. However, it is worrying to note that NTEs continue to contribute only about 18 percent to national exports and also it’s mainly of natural raw materials.
Moreover, the three broad subsectors experienced mixed developments in their earnings in 2019. The Processed/Semi-processed and Industrial Art and Craft sectors recorded positive growth rates of 11.15% and 12.82% respectively.
However, the Agric sub-sector declined by 27.82%. The decline, according to GEPA, was due to reduction in earnings from Cashew nuts, Bananas, Mangoes, Pineapples, Medicinal plants & parts, and Fresh or chilled tunas relative to 2018.
There is the need to target the production of commodities such as Cashew nuts & processed cashew, Natural rubber & rubber products as well as Processed fruits.
The creative arts industries also hold tremendous prospects that could improve export earnings for the country. Other potential exports include Root crops, Grains and legumes, Natural plant products, Vegetables, and Fruits.
