Business News of 2014-04-22

US$5 billion target from NTEs in limbo as tussle over EPA deepens

The Ghana Export Promotion Authority (GEPA) has admitted that the country can fail to achieve its US$5 billion revenue target from non-traditional exports (NTEs) by 2017, should the government refuse to sign the Economic Partnership Agreement (EPA) with the European Union (EU).

According to the Authority, refusing to sign would mean that Ghana would have limited access to the EU market, which is currently Ghana's top NTEs destination, accounting for more than 34 per cent of proceeds in 2012.

Given the huge influence of the union to the country's export earnings, the Chief Executive Officer (CEO) of the authority, Mr Gideon Quarcoo, told the GRAPHIC BUSINESS that his outfit was now sitting on tenterhooks as the tussle about whether or not government should commit the country to the agreement continued to deepen.

"Assuming that we don't sign and so, therefore, we are not allowed into their markets as we would want to, you know that our revenues will go down from exports because markets won't suddenly spring up around the world to soak up the products. We have to develop those markets and aggressively as we develop those markets, we will still be nowhere near taking up the slack, should entry be denied us into the EU market," he said on April 15 moments after the Trade and Industry Minister, Mr Haruna Iddrisu, had addressed journalists at a Meet the Press event in Accra.

The Ministry of Trade and Industry (MoTI) launched a National Export Strategy (NES) last year in which it set for itself a target of US$5 billion from NTEs by 2017.

Although the measures towards actualising that target are well in place, the GEPA boss said the signing or otherwise of the EPA, which, if signed, would give 100 per cent market access to Ghanaian exports, would be a key determiner in that regard.

"The reality is, you are measuring how much you are selling and if it happened that we are denied access because we failed to sign, then that will be a downer for us and that will push back the realisation of this 2017 target. It’s a serious issue," he said.

Concerns of CSOs

The Trade and Industry Minister had announced that the government was to undertake an impact assessment of the interim EPA (iEPA), which existed between the country and the EU from 2007 to 2014.

That assessment, the minister said, would provide empirical data to the government on the cost and benefits of the interim agreement to the country within the seven years that it existed.

The initiative, which Mr Iddrisu said would be carried through this month, followed concerns from civil society organisations (CSOs) over the proposed signing of the pack.

Meanwhile, the Association of Ghana Industries (AGI) has also waded into the controversy, saying in a statement published in the April 16 edition of the Daily Graphic that the signing of the agreement would defeat President John Mahama's recent promise of turning economy from import dependent to export driven.

"The EPA will have negative effects on industry, tax revenues, the potential of economies of scale, employment and income generation. With imports coming from the EU, manufacturing companies will be compelled to fold up, resulting in job losses," the statement, which was signed by the President of the association, Mr James Asare-Adjei said.

ActionAid international noted in a policy brief on the impact of the EPA on Ghana that the country was expected to lose some USS88,575 million a year between 2008 and 2022 in import revenue revenue should it commit to the EPA.

"However, the decline will be strongly felt from 2017 after the country liberialises two-thirds of its trade with the EU. In 2017 alone, Ghana may lose about US$202.8 million in tariff revenue from EU imports," the brief, which was published in July, last year, said.

EPAs

The EPA is a bilateral trade and economic agreement initiated by the EU, which is home to some 18 countries, for itself and other economic blocks within the Africa, Caribbean and Pacific (ACP) region, including the Economic Community of West of African States (ECOWAS).

Although the agreement enables some positive benefits to signatory blocks, most CSOs and private sector groupings in the continent, sub-region and country in particular, have vehemently campaigned against it, explaining that countries that committed themselves to the pack would be worse off in the long term.

Source: graphic.com
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