As Institute of Export & International Trade (IOE&IT) director general Marco Forgione visits Ghana to meet with organisation partners, businesses and government agencies and boost trade links, the IOE&IT Daily Update explores the economic and trade profile of the North West African country.
Overview
After experiencing centuries of colonial occupation and subsequent political turmoil, Ghana has largely entered the 21st century on a stronger economic footing, receiving recognition from international observers for its efforts to privatise and open up its economy.
A substantial portion of Ghana’s GDP is derived from agriculture, forestry and fishing, which employs over half the population.
Cocoa, in particular, has historically been a significant product, especially as an export. After privatising cocoa production, Ghana’s share of the world market grew from 25% to 60% by the late 1990s. It’s still the world’s second-largest producer of cocoa.
Other key agricultural exports include sugar, coffee, palm oil and kernels, along with other fruits and vegetables.
Ghana has substantial oil and natural gas reserves, and the state-owned Ghana National Petroleum Corporation (GNPC) is involved across all aspects of the industry.
Throughout the 2010s production has begun at new oil fields, including the offshore Jubilee field in 2010, the Tweneboa-Enyenra-Ntomme (TEN) in 2016 and the Offshore Cape Three Points field in 2017.
Crude oil was Ghana’s second largest export in 2021, after gold, selling over US$3.5bn internationally.
Gold exports totalled over US$5bn in 2021, with mining dating back to the 15th century. Since the 20th century other minerals have been mined including diamonds, manganese and bauxite (the basis for aluminium).
Recent economic struggles
Since 2013 the economy has struggled with a rising deficit and weakening currency, culminating in a sovereign debt default at the end of 2022.
A US$3bn International Monetary Fund (IMF) bailout was agreed last year but with conditions requiring Ghana to address its domestic debts before the package was agreed.
The FT characterised this move as creating a “stark choice” for struggling countries between losing access to foreign investment if they ask overseas creditors to pick up the financial pieces, vs the ramifications of damaging local banks, pensions funds, insurance firms and essentially asking the public to bear the costs.
UK trade
In recent years UK trade and investment with Ghana has seen a marked increase.
Trade between the UK and Ghana totalled £2.1bn in the year up to Q2 2023, an increase of 44.6% – £647m – from the previous year.
The balance of trade favours Ghana, who exported £1.1bn to the UK over the same period, while importing over £950m worth of goods and services.
In 2021, UK investment in Ghana stood at 2.6bn, amounting to 0.1% of outward foreign direct investment stock.
IOE&IT visit
As Forgione visits Accra this week, he expressed excitement about the mutual opportunity existing for the UK and Ghana, highlighting the countries existing trade links with South America, the US East Coast and Europe.
He added that through knowledge transfer, capacity building and training programmes Ghana’s trade potential could be realised, and with it, economic growth.
“Ghana is uniquely positioned not because of the geography of stable environment but the aspiration and entrepreneurship that exists in Ghana.
“IOE&IT is here to help turn what is potential into reality within the context of the African Continental Free Trade Area (AfCFTA) and Ghana can become the spark that ignites what the African continent can achieve.”