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Ghana Trade
The promotion of Ghana's foreign trade has been central to all
government plans to revive the economy since 1983. Under the ERP,
export-producing industries received the most direct support; they
also received the most indirect support through the improvement of
their proximate infrastructure. By promoting exports, the
government sought to obtain foreign exchange essential to repay
debts and to ease the country's restrictions on imports. Imports,
of course, are also necessary to upgrade many of the export
industries hamstrung for lack of equipment.
Prior to 1983, economic conditions conspired to erode the terms
of trade to such an extent that Ghanaians had reverted to smuggling
goods across the borders as well as to trading on the black market
on a significant scale. Ghanaians who had anything to sell could
multiply their earnings by selling their goods in French-speaking
countries, especially neighboring Côte d'Ivoire, and then changing
the resultant francs into cedis at black market rates. Smuggling
cut down the amount of foreign exchange available for official
transactions, leading to a reduction in imports, which hit
manufacturing enterprises dependent upon imported equipment and raw
materials especially hard. As a result, many consumer goods were no
longer available in Ghana, which further boosted smuggling across
borders of those countries where such goods could be obtained. By
1982 the World Bank estimated that transactions on the parallel, or
black, market constituted 32.4 percent of all domestic trade.
Since the start of the ERP in 1983, the government has
introduced several policies to adjust the pattern of Ghana's trade
structure. These include devaluing the currency as well as raising
producer prices for crucial exports such as cocoa to offset the
advantages of smuggling such goods across borders. In addition, the
government introduced an interbank foreign exchange market to
facilitate currency exchange. To ease the importation of essential
capital goods, but not necessarily consumer goods, the government
revised and reduced numerous import duties and trade taxes.
By the early 1990s, government efforts had resulted in the
restoration of many of Ghana's historical trade relationships.
Exports were again dominated by cocoa, which earned US$280 million
in 1993. Other significant export commodities in 1993 were gold
(US$416 million) and timber (US$140 million), followed by
electricity, diamonds, and bauxite. Ghana's nontraditional exports,
such as furniture, cola nuts, and pineapples, have also increased
significantly. On the import side, fuel and energy, mainly oil,
accounted for 16 percent of 1990 imports; followed by capital
goods, 43 percent; intermediate goods, 28 percent; and consumer
goods, 10 percent, according to the World Bank.
In addition to supporting traditional export industries such as
cocoa and gold, the government also attempted to diversify the
content of Ghana's exports. To encourage nontraditional exports in
the fishing and agriculture sectors, the government offered to
refund 95 percent of import duties on goods destined for reexport
and even to cancel sales taxes on manufactured goods sold abroad.
In addition, the government devised a scale of tax rebates ranging
from 20 percent to 50 percent determined by the volume of total
production that was exported. These incentives generated
considerable response. By 1988 more than 700 exporters were dealing
in 123 export products, the major items being pineapples, marine
and fish products (especially tuna), wood products, aluminum
products, and salt. By 1990, the last year for which figures were
available, the value of nontraditional exports had risen to US$62
million.
In 1992 the government's Ghana Export Promotion Council
announced a plan to raise nontraditional exports to US$335 million
by 1997 through increased market research, trade missions, trade
fairs and exhibitions, and training. Among its most ambitious
specific targets were increases in tuna and shrimp sales to US$45
million and US$32 million, respectively, by 1995, and increases in
pineapple sales to US$12.5 million. In the manufacturing sector,
wood products, aluminum goods, and processed rubber were targeted
to yield US$44 million, US$42 million, and US$23 million,
respectively. Earnings from salt were projected to rise to US$20
million.
In the early 1990s, Ghana continued to trade primarily with the
European Community, particularly Britain and Germany. Britain
continued to be the principal market for Ghanaian cocoa beans,
absorbing approximately 50 percent of all cocoa beans exported. In
1992, Germany was the single most important destination of Ghana's
exports, accounting for some 19 percent of all exports. Britain was
next, accounting for about 12 percent; followed by the United
States, 9 percent; and Japan, 5 percent. The same year, Britain
supplied approximately 20 percent of Ghana's imports, followed by
Nigeria, which provided 11 percent. The United States and Germany
were third and fourth, respectively.
Ghana also belongs to the sixteen-member Economic Community of
West African States (ECOWAS), founded in 1975 with headquarters in
Abuja, Nigeria. ECOWAS is designed to promote the cultural,
economic, and social development of its component states. To
achieve these ends, ECOWAS seeks to foster regional cooperation in
several areas, including removal of barriers to the movement of
peoples and trade, harmonization of agricultural policies,
improvements in infrastructure, and, as of 1991, renewed commitment
to democratic political processes and non-aggression against member
states.
Ghana also has a number of barter trade agreements with several
East European countries, China, and Cuba. Under the agreements,
imports of goods and services are paid for mainly by cocoa from
Ghana. A major change occurred in 1991 when the German Democratic
Republic (GDR, or East Germany) abrogated its barter trade
agreement with Ghana following the union of the two Germanies. In
spite of this, agreement was reached between the two countries to
honor existing commitments. In late 1991, the Ghanaian government
showed renewed interest in trade with the countries of Eastern
Europe following the adoption of free-market systems in the wake of
political upheavals in those countries. Ghanaian trade officials
expect that the barter trade system will give way to open market
operations.
Data as of November 1994
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