US businesses unhappy with contract sanctity

The biggest concern of United States businesses in Ghana is the failure of governments to respect contracts entered into with them, B&FT has learnt.

Florizelle B. Liser, Assistant US Trade Representative for Africa, told the B&FT in an exclusive interview that throughout her interaction with American businesses, their main concern has been with the preservation of contract sanctity.

“One of the issues raised by the business-people is whether Ghana will remain committed to respecting contracts it has entered into with them. They need to know whether their past and present investments are secured, no matter which government is in power,” she said.

The US Trade official said she would bring this concern to the attention of government officials during their regular interactions.

Ms. Liser is in the country representing the US government and leading the sixth session of the US-Ghana Trade and Investment Framework Agreement (TIFA). The TIFA focuses on trade and investment policies that help both economies grow, diversify, and create jobs. It is a bilateral economic dialogue and brings together both governments’ top trade and economic agencies.

Bilaterally, she described Ghana’s trade and investment ties with the US as fruitful and growing.

United States investment in Ghana is valued at US$1 billion.

Ghana-United States bilateral goods trade grew to nearly US$800 million last year on diverse US imports, including cocoa and vegetables, and US export of products including machinery and vehicles.

Ninety-eight percent of Ghana’s exports to the US enter duty-free under the Generalised System of Preferences, Africa Growth and Opportunity Act trade preference programmes, and MFN duty-free programmes.

In addition to the trade preference programmes, Ghana is in the fourth year of implementing its five-year nearly US$500 million Millennium Challenge Corporation compact to improve agriculture production, transportation, and rural development.

She said another concern of the businesses is lack of adherence to the ECOWAS protocol, especially with regard to economic integration among member-states.

“Too many barriers to Ghana’s exports and investment exist with its neighbours north, west, and east. These barriers act as a deterrent - not just to trade with your immediate neighbours, but to traders and investors around the world.

“Ghana must do more to integrate regionally, such as leading the efforts to implement, fully, the ECOWAS common external tariff to boost intra-regional trade,” she said.

Another issue of concern to American businesses is the high cost of doing business – of which she said America is ready to work with Ghana to improve the business environment.

“Lack of transparency breeds uncertainty, and poor road-quality impedes the timely delivery of goods, especially in the rainy season. Congestion at the seaports, airports, and customs transit points holds back trade prosperity-generating potential. Deficient cold storage facilities and other infrastructure hamper Ghanaians’ entry into higher value-added exports.

“Ghana’s rich soils have the potential to produce cash crops like plantain, cassava, mangoes, and papaya. American and European store-shelves are waiting for processed Ghanaian agricultural products like cassava starch, tapioca, and frozen vegetables.

Ghana has yet to reach its full potential in hand-woven indigenous textiles, woven fabrics like Kente cloth, and high-end designer wear.”

Source: B&FT