Export sector poised to yield $6 billion

Mr. Tawiah Akyea, Executive Secretary of the Ghana Export Promotion Council (GEPC), on Thursday said the export sector of the country is poised to yield a total of 16 billion US dollars by the close of year 2020 to make Ghana's middle income target a reality.

"A review of past experiences in the export sector provides confidence and hope that this is achievable within the given period," he said. Mr. Akyea was speaking at the on-going 52nd annual New Year school organised by the Institute of Adult Education (IAE) of the University of Ghana (UG), Legon.


It is aimed at evolving recommendations that will assist policy makers to strategise for the country to have greater stake in the evolving global economy.


Mr Akyea said it has been estimated that for Ghana to achieve a middle income status by year 2020, exports should be returning a total of about 16 billion US dollars.


"Out of the figure, 12 billion US dollars is expected from non-traditional exports and four billion US dollars from traditional exports," he said.


"Additionally, experts have forecast that Ghana's annual per capita income which currently stands at 400 US dollars, must rise to 1,700 US dollars to make the target a reality."

Mr Akyea said, "we have no choice than to achieve this goal - if not the economic impact threatens to result in intense poverty which is likely to lead to an equally intense social crisis, a recipe for Ghana to be eradicated from the world map."


Available statistics indicate that at the close of 1999, total export earnings stood at 2,435.41 million US dollars, comprising 2,031 million US dollars from traditional export and 404.41 million US dollars from non-traditional export.


Mr. Akyea said specific measures have been put in place to strengthen arrangements designed under the Economic Recovery Programme (ERP), whilst steps are underway to effectively address identified constraints and bottle-necks in the export sector.


He mentioned the constraints as supply, inter-mediate or logistic and demand or marketing aspects, adding that specific measures are in place to stem all those tides.


"It is in this light that the passage of the Export Development and Investment Fund (EDIF) Bill into law by the last parliament should be seen as truly historic," he said, adding: "This will help address the numerous impediments existing in the export sector".

For supply, he said, among other things, that efforts are underway to create a large producer base while intermediate constraints will be addressed through infrastructure development.


Mr. Akyea said effective linkages are also being created among industries in the free zones to ensure that the manufacturing industries among them could source their raw materials locally from cottage and satellite industries.


This, he said, will have a spin-off effect of growing local small-scale and medium-scale industries to contribute effectively to increased local production.


"In the ultimate, our export capacity will grow to meet imports and consumption levels with the resultant high foreign exchange earnings," he said.


Mr. Akyea said current trends in the export sector indicate a gradual decline in earnings from the traditional exports sub-sector as the prices of gold and cocoa soared on the international market and the forest from where timber is got fast depletes.

"The future of the economy therefore depends largely on non-traditional exports comprising everything other than gold, timber, cocoa and electricity, which have chalked an impressive growth in recent times.


"Socio-economic indicators show that if Ghana's import capacity breaks down, the entire economy will degenerate - Whilst we cannot stop importing, we have to build our export capacity to at least level up with imports to allow for favourable balance of payment and economic progress," he said.


Mr. Kofi Kludjeson, President of the Association of Ghana Industries (AGI) called on locally based large scale industries which import raw materials to support cottage industries to grow and serve as sources of raw material.


This, he said, would not only reduce the level of imports, but also improve local income generation and create a better environment for industry to grow.