An economist at the African Center for Economic Transformation (ACET) on Tuesday urged Ghana to build strong export competitiveness to boost economic transformation.
ACET’s senior director for research, policy, and programs, Edward Brown, said during a virtual transformation dialogue organized by the World Bank, ACET, and the Institute for Statistical, Social, and Economic Research of the University of Ghana, that the West African country needs to scale up value addition to its primary products to gain export competitiveness.
Brown said Ghana should begin with agroprocessing, focusing on precision farming and organic certification for high-value commodities; establish agro-industrial parks; and incubate technology.
By supporting local manufacturers, improving regulatory coordination, and investing in technical and vocational education and training, with workforce upskilling and technology-driven tourism, Ghana could be on the path of economic and export diversification, leading to transformation, he said.
He also called for deliberate positioning of the digital economy through expanding high-speed internet connectivity, building integrated digital platforms, developing the requisite human resource base, and leveraging the African Continental Free Trade Area (AfCFTA) as a step toward export diversification.
Speaking on Ghana’s Economic Transformation Outlook, Brown noted that Ghana’s overreliance on a few traditional export commodities made the export sector very weak and uncompetitive.
He cited the West African country’s traditional dependence on the export of gold, cocoa, timber, and other minerals, with a low inclusion of technology-intensive manufactured goods for export, as the cause of its low export competitiveness among its peers.
Moreover, the economist said weak local value-added processing and high reliance on imported raw materials undermine the country’s export competitiveness.
Comparing the export of extractive and non-extractive commodities, the economist averred that Ghana’s non-extractive exports remain deeply uncompetitive.
For instance, while the value of extractive exports grew from 2.3 billion U.S. dollars in 2000 to 20 billion dollars in 2022, that of non-extractives increased to 4.06 billion dollars from 1.1 billion dollars over the same period.
These factors, Brown said, culminated in a low contribution of exports to Ghana’s economic transformation, with a wide gap in the use of technology in Ghana’s manufactured exports compared to top transformers.
“Ghana has relatively weak high-intensity technology use compared to Senegal and Tunisia. The production and processing of basic metals continue to dominate medium-technology exports, indicating a limited diversification into higher value-added sectors, he added.
Meanwhile, he said the country’s economy is still severely exposed to external shocks, including the commodity boom and bust cycle, which often derails moderate gains made in real growth.
“Ultimately, we need to rethink our industrial policy to focus on areas that include new technology, reducing imports while increasing exports, taking advantage of AfCFTA, digital changes, fixing funding issues, improving infrastructure, and changing business rules,” Brown urged.
The government’s 24-hour economy policy seeks to promote export competitiveness through accelerated industrialization and value addition, focusing on processing raw materials by promoting 24-hour agro-processing, pharmaceuticals, garment manufacturing, and construction.
It also seeks to avoid isolated reforms by connecting agriculture, manufacturing, logistics, and finance into an interconnected system