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TRADE-GHANA: Non-Traditional Exports Are Booming

Francis Kokutse

ACCRA, Jun 19 2008 (IPS) - Impressive growth in exports from Ghana to the rest of the world has been witnessed over the past few years as more and more Ghanaians explore production in non-traditional sectors.

Nowadays it is not only this West African country’s cocoa and minerals exports that are enjoying a boom. Handicrafts and agricultural produce such as pineapples and mangoes have picked up over the past five years.

Finance and economic minister Kwadwo Baah-Wiredu recently indicated that the export sector as a whole has performed well, showing steady growth and earning foreign exchange. Exports raised 3,858 million dollars in 2007, representing growth of approximately 40 percent over 2006.

Central Bank Governor Paul Acquah confirmed the growth of the non-traditional sector at a recent press conference. Non-traditional exports rose by 27.1 percent to 259 million dollars for the first quarter of 2008, compared with 204 million dollars for the corresponding period in 2007.

This continues the growth in 2006: non-traditional exports grew from 207 million dollars in the fourth quarter of 2006 to 325 million dollars in the same period in 2007.

One of the sectors benefiting has been clothing manufacturing. Hidden along Kwame Nkrumah Avenue in Accra is the business place of Nora Bannerman. She has taken advantage of the favourable conditions to supply apparel to retailers in the U.S..

But the growth in production of new exports is even more noticeable when one moves out of the capital Accra into the countryside. Mango plantations have sprang up where there used to be virgin lands. Theophilus Owusu, a former teacher, has just started a farm near Adawso in the eastern region.

‘‘A friend introduced me to mango farming. When I got to know about the export potential from him, I decided to get out of teaching and put my land to better use,’’ Owusu told IPS.

Last year Owusu was able to export mangoes to Britain and Spain, earning 350,000 dollars. ‘‘But it has not been easy because much of the initial investment came from my own resources as the banks are not ready to provide support. It has been a very difficult journey but it has paid off in the end,’’ a relieved Owusu said.

Near him lives Grace Duah who is preparing the land on her farm for pineapple cultivation.

Duah lived in the United Kingdom for several years, working as a nurse: ‘‘I went into a shop in London to buy a pineapple and realised that it was imported from Ghana. This inspired me to move into farming.

‘‘Fortunately, my last child who was living with me got admission to university. I was able to take early retirement to return home and start my farm.’’

The tremendous growth in exports has partly been made possible by the U.S. government’s Africa Growth and Opportunity Act (AGOA), according to Abou Fall, AGOA support service coordinator in Accra.

AGOA is aimed at improving trade between Africa and the U.S.. The United States Agency for International Development (USAID) set up a West Africa Trade Hub in Accra where they provide technical assistance to people who want to export to the U.S..

There has been some criticism, though. Cashew nut farmer Johnson Otoo told IPS that the import standards in the U.S. can make it impossible to take advantage of AGOA.

‘‘I wanted to export cashew nuts but I realised that the conditions for packaging and even how the nuts were harvested were very stringent. I am still trying to find out how to go through the system,’’ said an exasperated Otoo.

In response, Fall explained that ‘‘the measures are what the U.S. authorities expect of every supplier. They are not directed at any specific exporter. That is why the Trade Hub is here to provide technical assistance. There are success stories of Ghanaian companies that have taken advantage of our services and have been able to sell to the U.S. market.’’

Given AGOA and the general emphasis on export production emanating from the North, Ghana’s government has put in place structures to assist non-traditional exports.

Three export trade houses, namely Ghana Export Trade Company Limited, Ghana Trade Centre and Ghanextrade, have been located across the globe to help Ghana’s producers and exporters to identify and select markets and to evaluate client products and related materials.

These centres also negotiate export contracts as well as provide promotional support to small and medium enterprises (SMEs).

In addition, finance is made available through the Export Development and Investment Fund (EDIF), established to provide financial resources to the non-traditional export sector.

EDIF’s credit facility covers agro-processing, salt mining and processing; textiles and garments manufacturing; aluminium and metal fabrication; wood handicrafts; and pharmaceuticals. A grant facility is also available which covers fairs and exhibitions, research, capacity building and project development.

So far, the country’s exporting zones board has registered 21 companies in various sectors such as metal fabrication, plastics, agro-processing, textiles, jewellery and machines manufacture. These are projected to generate 1,400 jobs.

Baah-Wiredu is also confident that the reciprocal trade deal called the economic partnership agreement that Ghana has signed with the European Union will enhance Ghana’s export capacity. ‘‘This will open new markets to Ghana’s non-traditional exports and thereby improve foreign exchange earnings from such exports.’’

Despite these efforts by the government, there still remain challenges in terms of access to affordable credit, especially for the non-traditional export sector.