Discussion Brief for the Export Strategy-Maker

GHANA

The Economy 

Ghana is abundantly endowed with natural and human resources. The natural resources include mineral wealth, a god supply of arable land suitable for both crop and livestock production, forest resources, marine and freshwater fish stocks. The economy is based on two sectors:

• a large, traditional sector (principally agricultural and informal activities);
• a relatively small, labour-intensive industrial and service sectors.

The economy has traditionally depended on exports of primary products, with about 60 per cent of the labour force employed in the agricultural sector which contributes about 46 per cent to the gross domestic product (GDP) (averaged US$7.3 billion in 1997 – 2000). The service sector accounts for over 40 percent of real GDP from trade and public sector services, while the industrial sector accounts for close to 14 per cent of GDP.

Ghana’s merchandise exports; mainly represented by Gold, Cocoa beans, wood products and canned fish averaged US$2.3 billion between 1998 to 2000. This included the non-traditional export Products (pineapples, vegetables, garments, aluminium products and others) which average free on board (FOB) earnings of US$400 million during the same period.

Total imports; made up of mainly crude oil, pharmaceutical, mining inputs and processed items averaged US$2.7 billion from 1998 to 2000. In an effort to address the obvious deficit in trade financing, national economic policies have been initiated in the last few years with the view of developing; a liberalized trade (import/Export) regime within the spirit and principles of the World Trade Organisation (WTO); liberalized investment regime; an export oriented, value-addition industrial development strategy and free zone development. The expected results are yet to be attained in view of supply level and marketing difficulties.

The cardinal policy of the new administration is to pursue national economic progress by promoting private sector into a "Golden Age" of business. The thrust of the policy is to encourage mutually beneficial partnerships between the public and private sectors, particularly in trade and industrial development.

To demonstrate this commitment to trade development, the President of the Republic has launched two pioneering initiatives to support private sector production of cassava starch and garments for exports.

With the new emphasis on trade development, the critical role of Trade promotion and facilitation agencies had been identified. The Ghana National Trade Support Network if functioning will provide the platform for the needed exchanges between agencies and the business community especially on issues related to supply development, transportation, utilities and market development.

The functions of the trade support institutions identified in the national trade network is attached as Appendix 1.

In a survey conducted by GEPC in 2000 on some selected trade-related agencies, the following were identified as the basis for the continued existence of TPO’s;

ÞProvide policy and strategic directions

Þ Provide coordination to activities of the stakeholders

Þ Forum for advocacy of the private sector

• Create awareness on trade-related benefits and potentials
• Bridge gap between local businesses and international ones
• Support competency development in international trade

The essence of a national trade support network is to provide or facilitate an enabling environment for doing business. A coordinated approach would ensure complementalities in programming as well as to avoid duplications of assistance to the main target groups which are:- the import and export companies.

The result of a survey conducted in 2000 by GEPC on a selected group of trade facilitation and export companies showed mixed reactions to the question of whether the trade network is functioning. Over fifty percent of the respondents indicated that they believed the membership of the network are working as a team.

The reasons given by the respondents in respect of the positive answer were that:

• Institutions in the network depend on each other for information in their operations. The GEPC for example uses the submitted export forms administered by CEPS. These are processed into the national export statistics for use by other agencies in the network, including the banks, product associations and export facilitation institutions.

• Institutions in the network periodically collaborate with each other to organize information dissemination seminars and training aimed at solving specific issues on trade.

• The network agencies have collectively worked to ensure the passage of some administrative instruments aimed at developing specialized support to the export sector. An example has been the Export Development and Investment Fund established this year to help address supply level constraints in the export sector.

The group with the negative perception felt:

• There seem to be too many duplication of support programmes by some network members to the same target group.

• There are no common operational programmes at the field level by network members, suggesting individualistic planning and programming.

• Activities of the various trade-related organizations are largely uncoordinated an not supervised by any recognized state agency.

The GEPC as a trade promotion organization in the network undertakes several activities aimed at supporting the work of those in the network as well as others outside it.

For example, in the training of potential and practicing exporters, the office depends on the expertise of personnel of network members as resource persons. This has enabled GEPC to execute the Ghana Export School (GES) programme. The GES has organized an average of 20 training sessions annually and trained over 7000 personnel of trade-related establishments. Over 85% were from Small and Medium exporting companies and 14% were start-ups. The Export Trade training initiative has contributed in the emergence of well trained personnel for the export companies in respect of appreciation of international business handling issues. This impacts on the smooth delivery of work of Customs, Excise and Preventive Service (CEPS), the Port Authorities (Kotoka International Airport/ Takoradi and Tema Harbours) as avoidable mistakes are minimized through proper cargo descriptions, manifest and general handling.

The Financial Institutions, notably the banks which now have adequate clientele knowledge in trade negotiations and investment relations, the most vital requirements to ensure payments to buyers’ to corresponding banks. The Ghana Export School has become ready avenue for the delivery of any NGO or development agency trade-related training in Ghana. For example, JETRO in the last 4 years collaborated with the GES to hold four export marketing seminars in Ghana. Similarly, Ecobank and DHL have two separate occasions sponsored specific GES training programmes for private sector Export Companies, Ministries and Agencies this year.

Major bottlenecks inhibiting effective functioning of organizations in the network were identified in the survey to include the following:

• Bureaucracy in dealing with matters of common interest.
• Absence of dedicated client services.
• Lack of defined roles and responsibilities of agencies in national export development programme.
• Insufficient mutual consultation to ensure complementalities in programming.
• Inadequate access to trade information technology.
• Inadequate financial resources to undertake core activities.

The respondents to the questionnaire indicated the following as suggestions for an effective functioning of the trade network.

• The establishment of a central export trade data bank where specific and general research information could be deposited and accessed by network members for technical guidance
• There should be a recognition of national coordinating roles of public sector agencies to ensure harmonious programming by agencies, NGOs and associations.
• It was also suggested that donor agencies, before undertaking any project must relate to the public sector agency responsible for export trade development in order to develop programes that would avoid duplications and facilitate complementarity and joint activities.

The export trade network in Ghana would function and become relevant to the activities of the membership when the central coordination roles of GEPC is enhanced and sustained. GEPC carries a national mandate by law to take on such a responsibility. A Forum should be created for the formal interaction of network members particularly to discuss Ghana export trade issues.

The annual programme of the network members should ideally be made available to each of the institutions and possibly discussed at their meetings. The network through the coordination agency will establish a communication platform through which technical information on standards, quality, packaging, freight and market trends could be electronically shared.

The meetings of the network group should determine possible ways of financing joint, common or central activities. The export community, the target group of the network activities could cost-share in programmes. The agencies whose corporate resources would permit expenditures on network activities should be encouraged to finance such programmes.

The most obvious weakness in the Ghana National Trade network is the communication gap. Thus the Trade Associations are running independent programmes. The Ministries are developing trade-related policies without adequate consultations with the financial sector, trade associations and NGOs. These could be easily reversed to show a trend of collaboration.

The communication gap has made many Agency and NGOs intervention to focus on areas that have been already dealt with by another member. At times, unhealthy competition for attention to particular programmes result in making the target beneficiaries more confused.

For instance, there are several production assistance and micro-credit schemes for Small and Medium Enterprises (SME’s). Two of such products were ginger and sunflower. Due to lack of information, export opportunities for the products selected by the participants, international and local NGO’s provided assistance to community level private operators only to face difficulties in marketing, largely because there were no basic infrastructure at the farm level and at the port effectively to handle the ginger and sunflower.

A national trade network would have provided opportunity for joint assessment of the technical and marketing issues and evolved complementary support programmes that would have stretched available resources for a more result oriented benefit to the target groups.

The Forum of the Ghana National Trade Network would in their regular meetings adopt GEPC to take on the central coordinating roles of the network. GEPC, relying on their national mandate would establish a Network Relations Department with specific responsibilities to create;

• Website
• Regular discussion For a
• Joint discussion on annual programmes.

Each of the network members would appoint one staff member as an antennal to the network and he will be expected to receive, retrieve and re-route all correspondences, communications and relevant information to the respective agencies.

Appendix 1  

i. Ministry of Trade and Industry (MOTI) 

The Ministry of Trade and Industry has the overall responsibility for the formulation, implementation and monitoring of the country’s internal and external trade as well as for industrial policies. It is responsible for strengthening trade relations with other countries consistent with Ghana’s membership of WTO.

ii. Ghana Export Promotion Council 

The Ghana Export Promotion Council (GEPC) is the public agency mandated to develop and promote non-traditional exports. GEPC is responsible for the development of national export awareness, identification of products with export potential and locating markets for them, providing exporters with the necessary assistance to enter markets, organizing trade missions, training exporters to upgrade skills in export marketing and export management and advising the government on export incentives and policies.

iii. Ghana Standards Board (GSB) and the Food and Drugs Board 

The Ghana Standards Board has been responsible for import and export technical standards and regulations. The Board issues new technical standards or revokes certain existing ones and has the authority to recommend the prohibition of import of products not duly certified as complying with established international standards.

iv. The Ghana Trade Fair Company Limited 

This body manages the trade fair complex and grounds and organizes domestic and international trade fairs. Participation in fairs abroad is organized in cooperation with GEPC and the Ministry of Trade and Industry which also contributes financially to the events.

v. The Ghana National Chamber of Commerce (GNCC) 

The Chamber was set up to carry out the promotion of trade, commerce and industry and is expected to provide its members with the services required to manage their activities effectively and efficiently.

vi. The Federation of Association of Ghanaian Exporters (FAGE) 

The Federation is a private non-profit organization, grouping more than 2,500 exporting firms and individuals active in non-traditional exports. FAGE offers a common platform to its members on advocacy and provides a range of services to its members covering trade and market information, product and market development and training.

vii. Export Finance Company (EFC) 

The Company is a privately operated non-bank financial institution providing export finance for non-traditional exports.

viii. Ghana Investment Promotion Centre (GIPC) 

The objective of the Centre is to encourage, promote, coordinate and monitor all investment in the Ghanaian economy.

ix. Ghana Gateway Project 

The project is designed to help remove the constraints to the development of trade and exports, and to attract foreign direct investments for industrial and infrastructure development.

The project’s development objective is to attract a critical mass of export-oriented firms in Ghana to jump-start growth as well as facilitate trade.

x. Private Enterprise Foundation (PEF) 

The Foundation was instituted on the initiative of four major business associations: Association of Ghanaian Industries (AGI), Ghana National Chamber of Commerce (GNCC), the Ghana Employers Association (GEA) and the Federation of Association of Ghanaian Exporters (FAGE).

PEF’s objective is to represent the interest of the private sector, promote industrial harmony, promote quality production and play an advocacy role for the private sector.

xi. Association of Ghanaian Industries (AGI) 

The association is committed to assisting the industrial sector by advocating for a better business climate in Ghana. Specifically, it seeks to provide a central organisation for the promotion of the interest of industry. 

xii. Ghana Free Zones Board (GFZB) 

The objective of the Board is to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs) and encourage the development of commercial and service activities at seaport and airport areas.

Under the USAID sponsored Trade and Investment Programme (TIP) and the successor Trade Reform Investment Programme (TRIP), some organisations were contacted to provide trade-related technical and marketing assistance. These include;

• Amex International Inc. 

AMEX has a USAID contract and is responsible for the Increased Private Enterprise Performance Project (IPEP). The project is to support economic growth in Ghana through assistance for an increased production and export of non-traditional products.

• TechnoServe 

TechnoServe assists in the organization of groups of local farmers and food processors to add value to agricultural products and to improve quality and volumes of exports.

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