The competitiveness of Ghana’s merchandise trade has declined over the past decade, leading to a reduction in the number of exporting firms and their participation in global value chains (GVCs), according to a World Bank report..
However, the report indicates that improvements in transport logistics and access to information and communication technology infrastructure over the past decade can be leveraged to expand trade and processing. economic ; an essential route to the creation of quality jobs.
The report was taken from a book titled “Ghana Trade Competitiveness Diagnostic-Strengthening Ghana’s Trade Competitiveness in the Context of AfCFTA”. Co-author Daniel Kwabena Boakye and Jean-Christophe Maur said trade in services and foreign direct investment are also important to ensure deeper integration into GVCs and manufacturing efficiency.
Daniel Kwabena Boakye is a Country Economist in the World Bank office in Ghana, while Jean-Christophe Maur is a Principal Economist in the Trade and Regional Integration team based in Washington DC.
The book was launched in Accra and was interspersed with a panel discussion.
This attracted the Hon. Herbert Krapa, Deputy Minister of Trade and Industry, Professor Asafu-Adjaye, Senior Researcher in Economic Management and Governance Programs, African Center for Economic Transformation (ACET), Dr. Priscilla Twumasi Baffour, Senior Lecturer, Department of Economics, University of Ghana, Legon and Mr. Seth Twum Akwaboah, Chief Executive Officer, Association of Ghana Industries.
“The potential benefit offered by the AfCFTA (about 0.5% additional growth in gross domestic product per year over the next ten years) is very significant,” says Pierre Laporte, World Bank Country Director for Ghana, the Liberia and Sierra Leone”.
This, he said, should motivate Ghana to harness the transformative potential of a trade by cultivating export-oriented activities in the manufacturing and service sectors and continuing the ongoing negotiations and implementation of the AfCFTA protocol.
The report presents four key policy recommendations and conclusions to enhance trade competitiveness in the context of the AfCFTA.
On enhancing trade competitiveness in the context of the AfCFTA, the report recommended that to enhance Ghana’s participation in GVCs, Ghana should enhance its trade competitiveness, particularly that of the manufacturing sector, promote direct investment inflows and deepen its regional integration efforts in regional markets and global value chains, particularly in the manufacturing sector.
According to the recommendation, this would help increase incomes by improving access to markets, technology, skills and increasing the domestic value added of exports.
Ghana’s participation in GVCs, he said, remains mainly in commodities, while its ambitious peers Kenya and South Africa have moved from the commodities group to a limited group of participants in manufacturing in GVCs.
With regard to improving the efficiency of trade facilitation, the report recommends strengthening customs administration to reduce contact costs with traders and improve the ease of cross-border trade.
Other trade facilitation improvements, he mentioned, include removing VAT on transit services and removing redundant and inefficient checkpoints.
He also recommended that a special effort be made to support segments of the service sector that are more dynamic with potential for innovation and economies of scale.
These include services such as business services, professional services, financial services and economic activities based on information technology.
Policy reforms in line with the recommendation are needed to take advantage of the potential opportunities offered by the AfCFTA and GVCs.
These include reducing tariffs, where appropriate, such as reducing tariffs on imported raw materials, eliminating non-tariff barriers, improving trade facilitation as well as promoting an enabling climate for business and investment.
Ghana, explained Mr.
He, however, said more needed to be done to remove barriers to trade flows in Ghana.