ECOWAS market bails out NTEs

Ghana’s burgeoning non-traditional exports (NTEs) are diversifying more towards the West African and Maghreb markets this year, to offset imminent shortfalls in earnings from its main crisis-hit European market.

“Since Europe, which accounts for approximately 50 percent of our NTEs, is reeling under financial crisis, we have paid greater attention to the ECOWAS market which is the second-biggest market for our exports,” the Ghana Export Promotion Authority (GEPA) Chief Executive Mr. Kwadwo Owusu Agyeman told B&FT.

The NTE sector suffered a -9.38 percent dip in earnings in 2009 during the global economic downturn, when total earnings registered for that year came to US$1.215billion as against the 2008 earnings of US$1.340billion.

Mr. Agyeman, addressing the 72nd Exporters Forum in Accra, disclosed that last year the NTEs picked up, hitting record earnings of US$1.629 billion -- which represented an increase of 34.1 percent in value over 2009 and 24.6 percent over the 2008 total earnings.

“Now we are faced with a similar situation,” Owusu Agyeman said, but added that the Ghanaian fruits which account for a significant proportion of the exports to the European market are also increasingly popular in the Maghreb region.

“We have, since 2009, been organising trade fairs and other promotional activities to give Ghanaian products a presence in these two prospective target-markets.

“Part of the reason for the decline in export growth in 2009 was a drop in Ghana’s competitiveness due to increased cost of production and low production volumes.

These challenges are being addressed concurrently, thus accounting for the impressive performance in 2010,” Agyeman said.

Ghana’s NTEs grew from about US$777.59million in 2005 to US$1.629billion in 2010, representing an average annual growth rate of about 17 percent.

NTE percentage contribution to total exports in the period has averaged 28 percent. Data from the Bank of Ghana shows that over the period total national merchandise exports of the country have also shown positive growth.

Total national merchandise exports grew from US$2.76billion in 2005 to US$ 5.822billion in 2010, depicting an annual average growth rate of 18 percent.

Agyeman was optimistic about the outlook for the 2011 export performance, despite the challenges presented by the European market.

He observed that the NTE sector in 2010 exceeded the GEPA set target of US$1.45billion for the year by 12.3 percent.

A review of the NTE sector revealed that the sector is currently driven by value-added products with a very strong supply base, such as in cocoa and timber products.

“The full benefits of these value-added products have not been fully exploited yet, as more and more of the raw forms are being exported,” Agyeman said - adding that it is the long-term objective of government that value is added to these raw materials.

He said, in the short-term, expansion of exports must be focused on value-added industrial projects without supply problems.

To achieve long-term objectives, Agyeman noted investments must be directed towards potential productive sectors which could then move the country into more value-added exports.

“It is expected that the Export Development and Investment Fund (EDIF) will expand its credit facilities to exporters and export facilitating institutions to help carry out their activities to meet the target level of US$1.8billion set for year 2011,” Agyeman said.