Business News of 2014-07-16

‘Import substitution critical to reversing Ghana’s trade imbalance’

The Chief Executive Officer of the Ghana Export Promotion Authority, Mr. Gideon Quarcoo has asked Ghanaians to embrace import substitution as a sure solution to tilting Ghana’s balance of trade in her favour. “Buy, use and sell Ghanaian,” he urged the public, saying it is the categorical economic imperative of our time.
“The Chinese are doing it, the British are doing it, Australians among others are doing it, back home on our continent the Nigerians are doing it, Kenyans, South Africans, many more are doing it and so why not Ghanaians?”
Mr. Quarcoo made the submission at the 2nd Graphic Business/Fidelity Breakfast Meeting in Accra Tuesday, and emphasised that for the next three years, Ghanaians must travel the straight and narrow road to economic emancipation.
“Intensify the drive for behavioural change, take pride in and value things Ghanaian, by buying Ghanaian, using Ghanaian, selling Ghanaian, wearing Ghanaian and eating Ghanaian - be authentically Ghanaian,” he said, explaining that nothing could be more patriotic for the patriotic Ghanaian.
The Breakfast Meeting programme, which he described as innovative and for which he commended the organisers – Graphic Communications Group Limited and Fidelity Bank, as well as media partner Citi FM, was on the theme "Maximising the Value of Exports to improve Ghana's Trade Balance".
Mr. Quarcoo noted that the importance of export to the growth of the economy cannot be overemphasized, pointing out that many countries like Japan, Korea, USA, UK and China have achieved economic development success on the backs of strong export led economies.
He said while running a balance of trade deficit has been a part of Ghana’s history as a result of the country’s heavy dependence on imports as against exports with her trading partners, continuing on that path will “only serve to deepen our import dependency and further deplete our foreign reserves.”
While acknowledging that Ghana has over the years pursued an export-led trade policy with a clear emphasis on the non-traditional exports as part of efforts to diversify exports, the results have been mixed, at best.
Traditional exports products like gold, timber and cocoa have experienced price fluctuations over the years, with non-traditional exports recording some modest, albeit less than expected growth.
“From 2007 when our non-traditional exports revenues exceeded a billion dollars, we marched progressively on. In 2008, it was a billion three hundred and forty US; 2009 we went back a little – a billion, two hundred and fifteen million US; 2010 we surged ahead, a billion six-two-nine million US; 2012, we really hit it – 2.364; and in 2013, the figures I have now are 2.436 billion US.” Mr Quarcoo said that while we may argue that these are modest growth, a national export strategy was last year launched in Tamale with the target of US$5 billion by the end of the year 2017.
He said as a country, Ghana was taking steps to expand her export base.
“We are talking about increased productivity, increased volumes and quantities for export, pure and simple. If you don’t have the numbers, you can’t fill the orders. Our products may be in high demand but if you only have small volumes you can’t even begin to fill huge orders – someone wants 15 containers every three months and you can’t fill that order because you just can’t fill the volume.”
He said quality is another crucial key to accessing export markets, and the EU for instance makes it a pre-requisite for qualification for her markets.
Mr Quarcoo emphasised the importance of adding value to local products, arguing that there is need to put technology to work for industries to add value to the products Ghana seeks to market to the outside world. “We’re talking particularly about agro-processing across the broad spectrum of horticultural produce. Again these come to mind – pineapples, papaya, mangoes, vegetables such as chilis, garden eggs, okra etc.”
“Then there is an area we are calling services for export that we are formally developing and rolling into our non-traditional export portfolio, and I’m talking about ICT, multi-media, business process outsourcing, consulting, medical tourism, education, large numbers of patronage in our tertiary institutions and other institutions…”
According to him, there is an urgent need also for a scaled up production of light industrial equipment with a view to increasing Ghana’s market presence for such equipment. Time therefore to harness the potentials of Ghanaian ingenuity and craftsmanship and its contribution to Ghana’s export, is now, he said, adding that the Gratis Foundation, the Suame Magazine in Kumasi and the like, Apostle Safo, the Kwame Nkrumah University of Science and Technology, the many polytechnics all abound in these potentials that need to be harnessed.
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