A study commissioned by the Small business Sector Advocacy Obstacle Fund (BUSAC Fund) has concluded among other folks that federal government really should be certain that the domestic competitiveness of Ghanaian corporations sorts the basis of Ghana’s AfCFTA overall competitiveness strategy.
This is since if Ghanaian companies can not be competitive in the domestic AfCFTA marketplace, they will struggle to be aggressive in the exterior AfCFTA market place.
The report, titled, “Ghana’s Competitive Prospective in The AfCFTA: A Place Competitiveness and Opportunity Evaluation Report,” was undertaken by investigate and advisory firm, Konfidants.
The aim of the examine is to give a wide being familiar with of Ghana’s trade competitiveness in the continental sector, map out marketplaces with the greatest probable within just AfCFTA for Ghana’s key industries and products and solutions, and make suggestions for boosting the country’s general performance in the AfCFTA.
With an emphasis on worth-added goods only, the analysis focused on 7 product or service teams that ended up chosen in session with field gamers and government, specifically: Agro-processed merchandise, Plastics, Prescription drugs, Mineral Oils, Textiles, Metal Manufactures and Cosmetics.
The country’s competitiveness was analyzed in two principal segments: competitiveness in the African export market (External Competitiveness), and competitiveness in the domestic market (Domestic Competitiveness).
The Direct Advisor for Konfidants, Mr Michael Kottoh presenting the findings and tips, explained Ghana’s intra-Africa exports benefit ranking (out of 54 international locations) in the 7 merchandise examined is commonly remarkable.
He said the examination showed that Ghana had weak comparative advantage in most of the 7 export items, Agro-processed products, Plastics, Prescribed drugs, Mineral Oils, Textiles, Metal Manufactures and Cosmetics.
The Guide mentioned on the pure basis of productiveness differential in between Ghana and its investing rivals, Ghana has discovered comparative advantage in only two of the 7 product or service teams analysed, which were plastics and mineral oils, inspite of position in the top ten in four items.
“The findings clearly show that the too much to handle greater part of Ghana’s best opportunity export markets are within West Africa,” he said.
On exterior competitiveness, Mr Kottoh stated the ECOWAS sector was around-concentrated and would have to have to make the most of AfCFTA to diversify away from ECOWAS into other sub-regional marketplaces.
He claimed this was necessary due to the fact it would allow the ECOWAS marketplaces to grow to be uncovered to heightened competition from non-ECOWAS states as a final result of AfCFTA.
The Expert mentioned the excellent issue, having said that, was that Ghana now exports to about 33 African marketplaces, which presented a significant export footprint to establish on for sector diversification and marketplace deepening.
“Outside of ECOWAS, North African marketplaces existing additional export prospective for Ghana than East African or Southern African markets, when it comes to benefit-added products,” he additional.
He claimed the believed potential for benefit-extra items in Eastern, Southern and North Africa were, on the other hand, extremely small, while AfCFTA was expected to by natural means enhance Ghana’s opportunity in these marketplaces.
Mr Kottoh reported export probable utilization analysis reveals that Ghana at this time underutilized a considerable share of its export potential in particular vital markets.
For domestic competitiveness, he reported the price of credit rating was Ghana’s weakest position, the country was ranked at the base of the list when when compared to the top African exporters.
He said the 14.5 per cent coverage fascination level in the place as of January 2021 was double the African typical of 7 per cent, and also as opposed unfavorably to 1.5 for every cent in Morocco, 3.5 per cent in South Africa, 4.5 for every cent in Cote d’Ivoire.
Mr Kottoh stated the country’s 15 per cent domestic credit rating to the non-public sector (as a share of GDP) was just one of the lowest as when compared to South Africa (146.5 per cent), Tunisia (82.4per cent), and Morocco (63.6 per cent).
He said Ghana’s recent normal of 12.9 cents for every kilowatt-hour for industrial customers as of December 2020 was much less aggressive towards nations around the world these kinds of as Zimbabwe, Tanzania, Malawi, Botswana, DR Congo, Mozambique, Zambia, Ethiopia, which all experienced expense of electrical power much less than 10 cents for each kilowatt-hour as at 2016.
“Worthy of notice is that Ethiopia as at 2016 charged 2.4 cents for each kilowatt-hour for consumers,” he claimed.
On suggestion, he referred to as on the Ministry of Trade and Marketplace to speed up the completion of a evidently described Wise system for AfCFTA implementation and option maximization.
The method ought to merge a sector share consolidation strategy to keep existing marketplace share in both the domestic economic system and existing foreign destinations a Sector expansion and diversification solution to find new places for existing solutions.
He explained it must also introduce new products in current destinations and introduce new products to new places with both equally staying anchored by a price tag-competitiveness tactic to ensure that expense of manufacturing and export in Ghana was at par with the least expensive in Africa.
The Consultant explained there must be an marketplace partnerships strategy that ensured that Ghanaian providers were being collaborating through consortiums and alliances to improve their competitive edge and stay clear of unhealthy levels of competition versus one particular another in AfCFTA markets.
He claimed the authorities have to handle the substantial value of finance by promptly rolling out, in partnership with the economical business, a backed export financing window for gamers in critical AfCFTA benefit chains that achieved a well-defined transparent criteria.