It has emerged that the government would have to take pragmatic steps to revamp export-oriented and value-added industries to fully harness the country’s gains from the world market.
The mining industry, which largely exports raw materials, remains the country’s highest export earner. Data from the Bank of Ghana (BoG) indicates high export earnings attributable to the mining industry as compared to other sectors of the economy such as manufacturing, agriculture or oil and gas.
For instance, in 2016, the mining sector improved its share in gross merchandise exports from 32.2 per cent in 2015 to 45.5 per cent. This translates into almost half of the country’s entire exports volume. The revenue generated for the economy from the export of minerals increased from $3.32 billion to $5.05 billion, ahead of cocoa and crude oil which ranked in $2.485bn and $1.39bn respectively.
The Deputy Chief Executive Officer (CEO) of the Ghana Export Promotion Authority (GEPA), Mr Eric Amoako Twum, in an interview with the Graphic Business disclosed that the authority was keen on supporting value-added industries to increase revenue injected into the economy annually from the world market.
He observed that exporting most of the gold produced in the country in its raw state was not earning the country enough revenue.
“We have to deliberately confront the value addition industries with a broad-based policy, like insisting on processing about 80 per cent of all the gold produced in the country locally than leaving the gold jewellery industry in the hands of few artisans,” he said.
He stated that his outfit was strengthening its presence across the various districts as part of an aggressive push to significantly raise earnings from non-traditional exports, including gold jewellery.
Though most of the economy’s export earnings come from the sale of raw materials, value addition to these raw materials have shown great potential in increasing the country’s export gains.
Data from the Ghana Free Zones Board (GFZB), the organisation with the mandate to encourage the export of value-added products, revealed that in 2016, revenue from the export of value-added products by companies operating under the board increased to $2.3 billion from an estimated investment of $270.72m.
The Deputy CEO of the GFZB, Mrs Kate Abbeo, told the Graphic Business in an interview that, “We have opened our doors to local entrepreneurs and investors, especially the youth, to seize the opportunity and venture into value-added and export-oriented industries.”
According to her, processing and manufacturing-based industries mostly rely on raw materials that abound in the country but are exported abroad in their raw states, which only benefit the buyers on the world market.
She stated that when raw materials such as cocoa and gold were sold on the world market in their natural states, it largely benefited the buyers of the raw materials because after purchasing them at relatively low prices, they were processed into finished and semi-finished products and subsequently exported at value-added prices.
“Data on foreign exchange earnings from major commodities we export to the world market are not encouraging, partly because we sell most of these commodities in their natural states to multibillion manufacturers who make the bulk sum of the annual revenue from these commodities,” she added.