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Opinions Sat, 7 Jun 2003

Identified Opportunities Need More Support.

I am constantly reading about export potential of produce and non-traditional exports, as an opportunity for business. Much of this article will be directed towards produce export, as Ghanaians think there is more to be had. This may be right but we definitely do not have the know how to fully meet the needs of the end users today and by no means are we competitive because we lack what is needed the most. Institutions focused on marketing these produce items and non-traditional exports in a targeted manner. The point here is to be proactive as opposed to being reactionary and that takes foresight.

First and foremost, there has to be exporting companies made up of people who understand the merchandising, marketing, operations and logistics of food at the retail level and the wholesale level in the Western world. The various stages food goes through before it gets to the consumer and the requirements to be met by either retailers or wholesalers at each stage of the supply chain. Once we understand the whole supply chain, we can identify where to create value with our products and why we should select a certain point with respect to the supply chain to create our value.

People need to understand how to create value, of which quality is a component, gives the exporter, an edge over the competition, while at the same time making products attractive to importers.

Marketing is a powerful tool in business, but most importantly whenever one talks about export of produce items as a source of opportunity, we need to remember that every tropical country has potential. What separates others is the comparative advantage combined with an aggressive marketing approach.

If we look at the effort put into the PSI for starch, it is clear that a well-coordinated effort can produce results, and it is such an effort that is needed for any of these cited opportunities in the export potential of produce and non-traditional exports in becoming realistic opportunities that create wealth.

We could go a step further and create national brands under which we could market produce or whatever on behalf of exporters, through marketing companies specially designed and tasked with this initiative of promoting, seeking and acquiring markets for local produce on behalf of the exporters. With this, we could create value with the brand and leverage brand equity as it develops. These are not things individual organizations can do now, especially when we are talking about the sizes of these exporters with respect to world demand of some of the items proposed.

The level of sophistication needed when it comes to the export and marketing of fresh produce may not be known to the average person unless one is a practitioner in the field. The industry is advanced and technology continues to enhance operations thus making it a more sophisticated environment today than it ever was.

In the western world, retailers get tiny margins on items, with focus on tonnage to create the desired gross margins or profits. As such, pricing of the product is one thing, but items such as packaging to reduce shrink or packaging to cut down labor at the wholesale or retail level is value that can be marketed and can be used to differentiate ones products from others. Then there is the issue of comparative advantage. Is it in our favor to presume that we have a business opportunity with all tropical produce or we can direct our resources elsewhere to get more output.

In theory export should represent what locally is not consumed, as the comparative advantage for the nation in question is such that they can specialize in a commodity and produce beyond their local consumption, as others seeking that commodity but may not have that comparative advantage, will choose to utilize resources elsewhere, and buy (exchange) what they need from us.

This concept of comparative advantage needs to be looked at, as every situation cannot be an opportunity if it is viewed with considerations from this perspective. It is important since without comparative analysis injected into some of our “opportunity finding missions”, the country could be misguided in placing its resources in areas that provide no return.

The government must also understand that as a nation we have a lot of broken processes and systems, so to just identify opportunities is not good enough. We need to mobilize, facilitate and execute to satisfy that opportunity. It does not mean that we are creating state agencies or companies, but rater providing the “meat and potatoes” needed to really create the mechanisms for such feasible opportunities to be realized. In using this model, once established, we have a stock market, which we (Ghana) can use to transfer ownership, so that government is not in the business of running companies anymore.

The bottom line here is that the government needs to modify its approach in its quest to assist the populace in creating wealth, and understand that the issue in most cases in Ghana has not been the lack of people’s ability in identifying opportunities. It has been with poor systems, poor structures and broken processes, which have failed to move efforts beyond the “first floor”. Capacity in terms of organizational and professional skills actually is what is needed with a strong informational component to keep people such as fruit or produce exporters informed about international issues, their impact on the local economy and also how best to market their items in a competitive way.

There is a way out of our misery and some steps taken so far are in the right direction. However, there needs to be more of a holistic approach in some of our initiatives and we need to be realistic in our expectations.

The government must see it as a matter of prime interest that every opportunity for wealth creation is not just given lip service at the identification stage, but rather set up structures that facilitate the execution of sound investments in these opportunity areas, since this is one way to accelerate the path to the desired goal of making the private sector the driver of our economy.

Columnist: Folson, Ako