Business News of Monday, 26 November 2012
Source: Economic Tribune
Ghanaian manufacturers need to redefine their West African markets if they are to realise growth expectations in an increasingly difficult sub-regional trade environment, Trade and Industry Minister, Hanna Tetteh has said.
“Nigeria, West Africa’s biggest market, is incidentally its most difficult to enter and do business and there is therefore the need for Ghanaian manufacturers to target other sub-regional markets with growing demands,” she said.
Addressing the Association of Ghana Industries (AGI) at the launch of the 23rd anniversary celebration of the Africa Industrialisation Day, the Trade Minister urged domestic manufacturers to focus on those countries in the region that lacked manufacturing capabilities.
A deliberate effort to refocus Ghana’s export drive to hitherto un-serviced sub-regional markets, through solo trade exhibitions, organised by the Ghana Export Promotions Authority (GEPA) to countries including Sierra Leone, Liberia and Mali, among others, have helped boost Ghana’s regional trade.
Over the past couple of years, contribution of the country’s sub-regional exports to total national exports has moved up from eight percent to 12 percent, in terms of export revenue, Ms. Tetteh disclosed.
“Significantly, this feat has been achieved at a time when total national exports values have recorded tremendous growth, aided by oil exports and strong commodity prices,” Ms. Tetteh said adding that domestic manufacturers don’t have much time to move up the efficiency ladder, in the face of unrelenting competition.
Nana Owusu Afari, President of the AGI, noted that the industrial sector had made tremendous strides over the past three years in its engagement with government, policy makers and business sector regulatory institutions in efforts to address challenges confronting the sector.
“Despite much progress made, poor power supply, lack of credit and its exorbitant rates when available, and the meteoric decline in value cedi from the beginning of this year, have all conspired to make local manufacturers uncompetitive,” Nana Owusu-Afari said.
In a presentation on the topic “Accelerating Industrialisation to Boost Intra-Africa Trade” AGI Vice President for the Small Scale sector, Mr. Samuel Appenteng expressed concerns whether; “we are not just talking, and talking and talking; and whether we are committed to Africa Regional Trade?.
He noted that regional trade had not worked well for West Africa as it is for the southern and eastern African blocs.
Intra-Arican trade, he noted, is still low compared to trade between Africa on one hand, and traditional powers such as the EU and the USA on the other, as well as emerging partners such as China.
Data from the OECD ComTrade shows that, whilst trade between Africa and major trading partners was US$ 763.4 billion in 2009, intra African trade was just US$ 358.9 billion, with oil accounting for about 70 percent of goods traded.
“What is more disturbing is that Africa exports commodities such as gold, cocoa, oil and copper to the rest of the world and imports manufactured goods from these countries.
“Several factors account for the poor intra African trade, including complex customs and administrative procedures and regulations, inefficient and costly transit systems as evidenced by numerous informal roadblocks along trade corridors, differences in rules of origin, trade documentation, and product and transport standards,” Appenteng said.
Trade Minister Hanna Tetteh said government has developed clear coherent policies to facilitate the growth of local industry by addressing constraints to their competitiveness.
She hinted that a National Development Industrial Fund, which in all probability would be an equity fund, is critical to the private sector development strategy and will seek to address the persistent challenge of lack of access to adequate and affordable capital.
“But Industrialisation cannot be achieved by focusing on the capacity of manufacturers alone; we need to create opportunities in virgin markets which we have ignored but are easier to enter and have high growth potential.
“We should focus on the things that will make us succeed, rather than always focusing on challenges that make us fail,” Hanna Tetteh said.