Home to one-third of the continent’s population, the Economic Community of West African States (ECOWAS) is fast becoming one of the largest and important economic blocs and market destinations for Ghana’s Non-Traditional Exports (NTEs).
With a population of about 370 million and a GDP estimated at US$615 billion, the ECOWAS market remains key to Ghana’s quest of becoming a competitive export-led industrialized economy. Currently, the country exports its NTE commodities to all the 15 member-states, including Mauritania.
According to the Ghana Export Promotion Authority (GEPA), the sub-region has consistently garnered the 2nd position in terms of the major export destinations for Ghana’s NTEs in the past decade. However, in 2013 and 2016, the West African economic bloc overtook the European Union (EU) when it emerged as the leading market for Ghana’s NTEs.
Performance of ECOWAS in 2019
Available data show that in 2019, Ghana exported a total of about US$ 836,511,513 worth of NTEs to ECOWAS, consisting mainly of manufactured/processed products. The earnings, according to the GEPA, represented 28.85 percent of the total NTE earnings globally. The strong performance in 2019 also represented a 12.79 percent growth over the 2018 figure of US$ 741,661,288.
ECOWAS was the largest market for 3 of the top 10 NTE products in 2019, namely, Articles of plastic (NES), Palm Olein, and Iron/Steel circles, rods, sheets billets.
Burkina Faso came up as the lead importing country in ECOWAS and Africa for Ghana’s NTEs. It maintained its position as the top importer in 2019 from 2016 through 2017 and 2018. Togo and Senegal were the second and third lead importing countries in ECOWAS and Africa respectively. Burkina Faso contributed 26.26 percent of the total top ten earnings with Guinea (the tenth) contributing 0.78 percent.
Data from GEPA showed that the average import value by the 10 top importing ECOWAS States in 2019 was US$82.86 million relative to US$73.57 million in 2018. This showed an increase of 12.79 percent in average import value of the top ten ECOWAS States.
Benefits of trade agreement
“Exports to ECOWAS have been positively affected by the implementation of the ECOWAS Protocol on originating Industrial products which inter alia allows products manufactured within the Bloc to enjoy duty tree and quota free access to the ECOWAS market. The protocol known as the ECOWAS Trade Liberalization Scheme (ETLS) has been a major boost to Ghanaian exports of processed/manufactured products to the ECOWAS”.
GEPA
As of 2019, there were about 625 manufacturing concerns with more than 1,000 products registered under the Scheme, according to the GEPA.
In 2019, Non-Traditional Export (NTE) products were exported to 155 countries. These countries are represented in five groups as follows: European Union (EU), ECOWAS, Other Developed Countries, Other African Countries, Other Countries.
The EU market, the leading destination for NTEs, had a market share of 38.18 percent by absorbing US$1.11 billion worth of NTEs. The Netherlands was the lead market destination for NTEs, contributing US$ 381.133 million in 2019.
Target for the next ten years
Despite the huge potential of NTEs, Ghana has not befitted much from the sector, earnings remain low even though recent data point to some improvements.
Data from the Bank of Ghana show that the value of the Top Ten Non-Traditional Export commodities exported in the second quarter of 2021 amounted to US$316.53 million compared to US$273.44 million recorded for the same period in 2020.
The Ghana National Export Development Strategy (NEDS) envisages that over a duration of 10 years, Non-Traditional Exports (NTEs) will grow from $2.8 billion in 2020 to $25.3 billion in 2029. To meet this target, Ghana requires a market considerably larger. Luckily, given the duty-free and quota-free preferential trade arrangement in intra-African trade, the African Continental Free Trade Area (AfCFTA) offers the best option and prospects for Ghana’s industrial products.
This calls for the proper implementation of the NEDS and other government initiatives as well as private sector support to aid Ghanaian companies to penetrate and position their goods and services on the market of about 1.2 billion people.
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