AGOA, “Mango-less” Run Around for Ghana

Mon, 26 May 2008 Source: Casely-Hayford, Sydney

By Sydney Casely-Hayford, The New Ghanaian Newspaper

For an agrarian economy, you would expect agricultural growth, both in-house and exported. For Ghana, the last year has translated into fruitless attempts to export its seasonal crops of mango, pineapple, avocados and other exotic and sought after passion foods in the Diaspora.

A year to May 9th, I wrote about AGOA and Ghana’s wasted effort. The article had its fair share of criticism, mainly from government institutional heads, whose parochial interests trump reality especially when economic indicators matter. My analysis was a simple regurgitation of the US International Trade Administration report for 2006. In that year US imports from Africa, sanctioned under AGOA showed 93% of all trade came from Oil and related sectors. Highest imports were from Nigeria (47.2%), Angola (19.8%), South Africa (12.7%), Republic of Congo (5.2%, and Chad (3.2%). This was despite all the fighting in Congo and Chad and clearly heightened incidences of human rights abuses in the latter two countries.

The comparative 2007 report re-trends the statistics shown in 2006. Petroleum product imports accounted for the largest portion of AGOA imports with an overall share of 93%, ergo, the US is really only very interested in oil imports from Africa. AGOA has a remarkable list of products for export. At last count there was a list of over 800 items, including apparel and agricultural products. The US can buy oil directly through other sources; OPEC and direct bilateral agreements, of which there are several.

The concept of AGOA introduced by the Clinton administration was to encourage African countries to increase their exports in non-traditional products to the US, thus adding value to raw material from developing economies.

Instead, US imports grew 18% with Nigeria, Gabon - 60%, Chad – 12% and Equitorial Guinea – 3%. Imports from South Africa grew 21%, including minerals, catalytic converters and crude oil. AGOA textiles and apparel imports remained virtually constant at $1.3 billion and agricultural products fell 25% to $271.5 million. Top five beneficiary countries were Nigeria, Angola, South Africa, Chad and Gabon. I hope the pattern is clear here. Angola recently passed Nigeria as Africa’s largest oil producer The Southern African country, one of OPEC's newest members, claimed the top spot for the first time pumping 1.873 million barrels per day in April, 55,000 bpd more than Nigeria.

Will the US cease to use this back door legislation to satisfy its fossil oil needs? I don’t think so.

Ghana shares a lead with Togo in Shea Butter export (130,000Mt – 2004). With the turmoil in Cote D’Ivoire we are set to export 660,000Mt this year. We do virtually nothing in spices, not because we do not have any in Ghana, we simply have not focused on exporting the produce. We are still second to Cote D’Ivoire with a 35% share in a $162 million export market and do small fraction of bananas (4%) of the Sub-Sahara share of $437 million. We trail Nigeria, Cameroon, Liberia and Cote D’Ivoire with 4% of natural rubber exports from 42,000 acres from one single company – Ghana Rubber Estates Limited. Competitively, we are a no-show in diamonds and barely make the grade in wood exports with 6% of a market size of $68.7 million. Are there great opportunities? Certainly. Where is my trade minister? US trade shenanigans aside; I question whether we are getting the message at all.

Which is why our efforts have become “mango-less”.

Ghana has increased its non-traditional export crop significantly in the last few years. We have a good reputation for premium cocoa, best grade pineapples and we are the largest exporter of yam from Sub-Sahara Africa. There are significantly more Ghanaian owned food shops in the USA, more than any other African country, close to 540 and we open new ones every week and month. Our food shops go to maintain the nostalgia and preserve our traditional food tastes and eating habits. How many of us go a week without a bowl of fufu or banku or kenkey or akple?

Yet, we cannot see the benefit in this program, high jacked for the benefit of the US penchant for extreme waste in fossil supplies. President George Bush has visited Ghana twice this year already and had his “bi-lateral” talks with leaders and private sector business people. There is oil in Ghana and large quantities of it. You can feel the excitement building up. Tullow Oil and Anarko in Cape 3 Points. The US President does not travel for nothing! Will I still gripe come 2010 when we in turn become a large oil producing country? Yes! Who knows whether the hybrids and fuel-efficient cars would have made gas fueled engines redundant by then? I would like to take my chances now and REALLY focus on taking advantage of the AGOA concessions, before the US reverses AGOA..

Please don’t mention the Millennium Compact, I will tackle that in the next piece.

Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

Columnist: Casely-Hayford, Sydney