Ghana:

Adding value to exports can compensate for negative trade balance with UK

The 2020 Business Climate Report has urged Ghana’s horti industry to change its old practice of exporting primary products to the UK, as this has persistently resulted in a negative trade balance at the country's expense. The report indicated that the UK imported US$242million worth of goods, while Ghana on the other hand imported USS473 million worth of goods from the UK — presenting a negative trade balance of about US$231 million.

According to the report, this is attributed to factors such as the country's continuous export of raw materials and import of manufactured goods, coupled with a drop in the level of exports against imports in trade with the UK — a trend that may continue for a long time if nothing concrete is done to change the narrative.

"The goods traded between the two countries have not changed substantially over the period. Ghana's exports to the UK remain largely primary products, while imports from the UK have mainly been manufactured goods. This accounts for the negative trade balance to the disadvantage of Ghana. Our forecasts show that this trend is likely to continue into the near future," the report stated.

The report further projects that leveraging the Africa Continental Free Trade Area (AfCFTA) agreement could be a game-changer for the country to correct the difference of trade, as it creates a single continental market for goods and services —enabling free movement of businesses, persons and investment on the back of reduced tariffs and trade barriers.

Source: ghanaweb.com


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