The Government fully recognises that international trading rules have a direct impact on Ghana’s development, especially in the context of globalisation. In this regard, the Government will continue to fully participate in negotiations in multilateral trading fora to ensure Ghana’s national interests are secured, and that the trading rules provide the best opportunities for Ghana’s development. This will improve market opportunities and support Ghana’s export development, whilst applying disciplines in national regulations that support competitive production, and offer fair priced products for all consumers.Participation in the World Trade OrganisationMarket Access in Industrial and Agricultural Products Policy Context
In the global trading environment, WTO negotiations progressively reduce tariffs of all member countries and set the framework within which all member countries must trade. Such commitments are made by all members including Ghana. Agricultural subsidies as well as high tariffs and non-tariff barriers in other countries limit the potential for Ghana to produce and trade in products of interest to Ghana. Policy Objectives
To obtain global reductions in tariffs and the elimination of non-tariff barriers on goods produced in Ghana and improve export opportunities for Ghanaian producers. To obtain reductions in subsidies on products which compete with Ghanaian exports. To help develop Ghana’s agricultural and industrial sectors to compete in global markets.Policy Prescriptions
Government will seek improved access to key export markets whilst retaining sufficient flexibility in its own tariff arrangements to allow development of competitive local industries. In agriculture, the Government will support progressive elimination of export subsidies as well as the substantial reduction of trade-distorting domestic support at WTO. Government will ensure that it retains the right to support its own producers. Trade in ServicesPolicy Context
The services sector is an important part of the Ghanaian economy in terms of domestic supply and export potential. Imports of cost effective services can act as a catalyst for development. Policy Objectives
To support the development of a strong domestic services sector. Policy Prescriptions:
- To provide access to foreign services not readily available in Ghana. Government will engage in successive WTO Services negotiations to obtain improved market access in partner WTO countries in specific service sectors where Ghana has an identifiable opportunity.
- Government will make selective commitments for liberalisation of its own services market, whilst ensuring that there are necessary legal and regulatory provisions to support the development of the local services sector and protect consumers from unfair practices.
Other WTO Issues
Policy Context: Other trade related issues are increasingly being tabled at WTO to be included in trade negotiations. These include trade facilitation, investment, government procurement, competition, environment and labour standards.
To prevent negotiating multilateral trade rules which tend to restrict national policy flexibility and impose onerous obligations on Ghana without conferring commensurate benefits.
Government will evaluate the potential benefits vis a vis costs before entering into negotiations on any new issues.
Sub-Regional Integration (ECOWAS)
The integration of the Economic Community of West African States (ECOWAS) into a full customs union will provide access to a larger market, thereby promoting investment and industrialisation. This will also enable Ghanaian products to compete freely in the regional market and promote exports. Increased regional competition will bring lower prices and a greater range of both imports and local products to the benefit of consumers and producers.
To facilitate trade between Ghana and other ECOWAS countries.
- To enable Ghanaian products to compete in the regional market freely and thus promote exports.
- To promote industrialisation and investment.
Economic Partnership with the European Union
- Government will pursue the establishment of a full customs union in ECOWAS whilst honouring all obligations in respect of existing ECOWAS Protocols.
- Government will fully support measures aimed at removing obstacles to full ECOWAS integration.
Policy Context: Ghana has benefited from non-reciprocal market access to the European Union (EU) since 1975 and the majority of Ghana’s exports enter that market duty and quota free. Hence, the EU has become Ghana’s largest trading partner. In order to enhance Ghana-EU trade relations, Ghana is expected within the context of the Cotonou Agreement to negotiate a new WTO compliant agreement with the EU taking into consideration Ghana’s level of economic development.
Offering enhanced access to European products will reduce government tariff revenue, raise hard currency requirements for increased imports and subject domestic industry to greater competition with EU products. However, consumers and producers in Ghana will benefit from lower priced goods and it will, in the long term, promote competitiveness in Ghana.Policy Objective
To maintain and enhance market access in both goods and services whilst limiting the negative impacts on revenue and local industry.Policy Prescriptions
- Government will support the Economic Partnership Agreement (EPA) process and negotiate through ECOWAS, the most flexible and asymmetric EPA possible, with a long phasing-in period. This will ensure Ghana maintains and improves market access whilst protecting sensitive industries until such time as they are able to compete with EU producers.
- Government will seek improved access to the services market of the EU in return for liberalisation of the services market of Ghana in sectors where Ghana has a need for EU services.
- Government will link any liberalisation to provision of technical assistance and technology transfer from the EU to build domestic supply capacity in goods and services. This will ensure Ghana takes full advantage of the opportunities provided.
- Government will seek support for its own trade facilitation efforts through the EPA to reduce transaction costs of importing and exporting in Ghana.
Wider African Integration
Closer ties with other African partners will result in additional opportunities for trade and economic development in Ghana and provide a stronger collective voice on the world stage leading to the shaping of multilateral trading rules that take account of African interests.
To mobilise regional resources and investment to support Ghana’s economic growth and trade development.Policy Prescriptions
- Government will participate fully in programmes and projects initiated under the NEPAD framework that are consistent with Ghana’s development agenda.
- Government will intensify efforts aimed at integrating African countries through AU and NEPAD
Bi-lateral Trade Agreements
Policy Context: As a complement to multilateral efforts, there is scope to develop improved access to selected markets on bilateral basis. This will lead to increased export opportunities and cheaper imports of inputs for local production.
To take advantage of opportunities offered in key strategic markets, foster business cooperation and technology transfer and encourage Foreign Direct Investment (FDI).
Government will seek improved access to key markets through bi-lateral trade and investment arrangements, including preferential trade, economic, technical, social, cultural and political agreements.
Preferential Market Access
Policy Context: The majority of developed countries provide Ghana and other developing countries with preferential market access under schemes such as the Generalised System of Preferences (GSP) and African Growth and Opportunity Act (AGOA). There is scope for enhanced utilisation of these opportunities by the Ghanaian private sector.
To take full advantage of all preferential schemes.
Tariff Measures and DutiesImport DutiesPolicy Context
- Government will actively identify, develop and promote products for which Ghana has significant potential under preferential schemes, as part of its overall export promotion agenda.
- Creating a Fair and Transparent Import-Export Regime
- To encourage investment and raise competitiveness in both exports and imports and provide lower prices to consumers, the Government will systematically identify and remove restrictions in Ghana’s import-export regime.
Restrictions in the import regime can lead to investment in "protected"sectors rather than sectors for which Ghana can be competitive. This may reduce export potential and can result in higher prices of both imports and local products. Policy Objectives
- To ensure fair prices to consumers especially for the poor and vulnerable sections of the community.
- To encourage competitive production in Ghana.
- To level the playing field in international trade and counteract unfair trade practices such as dumping and subsidies by foreign companies and governments.
- To ensure a predictable tariff regime which reduces business risk and encourages investment in domestic production.
Government will ensure that import tariffs and charges of equivalent effect, are applied in a simple system of progressive tariff rates for inputs to production, intermediate products and consumer products. These rates will be periodically reviewed.
Government will ensure a reasonable level of protection to all domestic producers on a sectoral basis, depending on their ability to compete with imports whilst encouraging improvement in competitiveness and development of export potential overtime. Government will use tariffs to check unfair trade practices and provide local producers with a reasonable level of protection. Government will effectively use tariffs to encourage domestic production of strategic commodities.
Exemptions from the applied tariffs will only be granted based on a clear and transparent set of criteria such as imports for government, education, environment, health and charitable purposes.Export Duties and TaxesPolicy Context
Export duties and taxes tend to increase costs and make Ghanaian exports uncompetitive in global markets. Policy ObjectivePolicy Prescription
To ensure export duties and taxes do not increase the cost of exports and make them uncompetitive in international markets.
Government will only levy export taxes on selected products at a rate equivalent to the cost of any services provided to that sector, exemption from taxes normally payable and any social costs such as damage to the environment or utilisation of national resources.Non-Tariff MeasuresImport Permits and Prohibitions Policy Context
Import controls are sometimes used as non-tariff barriers to trade, which can distort investment decisions to favour uncompetitive sectors. Policy Objective
To prevent the control of imports distorting efficientallocation of domestic resources. Policy Prescription
Government will ensure that both import prohibitions and import permits are applied on the basis of clear and transparent criteria. These include environmental protection, national security, health, public safety, moral and social welfare and cases of unfair trade practices and dumping. Rules of OriginPolicy Context
Ghana has plurilateral and bi-lateral trading arrangements, with differing margins of preference, aimed at increased trade and industrialisation. Policy Objectives
To ensure Ghanaian producers take advantage of preferences in partner markets. To ensure that the import regime is not distorted by abuse of the system of preferences through misapplication. To build capacity for effective negotiation and administration of preferential arrangements. To ensure rules of origin are simple and transparent.Policy Prescriptions
Government will establish a framework for rules of origin to ensure that only those imports which qualify, obtain preferential access to Ghana’s market. Government will support producers to take advantage of the export opportunities provided under such preferences. Quotas and Tariff QuotasPolicy Context
Policy Objective: Policy Prescription:Export ControlsPolicy ContextPolicy Objective
Quotas are a mechanism for stabilising prices and protecting domestic production and consumers. However they are relatively inefficient policy instruments and are also difficult to administer. To stabilise import or export prices in the most efficient manner possible. Quotas and tariff quotas will only be used temporarily when other policy instruments fail to stabilise import or export prices. Excessive control of exports can limit export potential and distort domestic markets. To prevent the control of exports reducing competitiveness in international markets. Policy Prescription
Government will ensure that both export prohibitions and regulations are based on clear and transparent criteria such as maintaining the national reputation for products of a certain standard and quality e.g. cocoa; and preserving the environment, natural resources, cultural heritage, biodiversity and food security.IncentivesExport Incentives
Incentives to exporters and producers of export products attract investment to the sector and boost export development. To lower the cost of production of exports and make them more competitive on international markets. To ensure that administration of the incentive regime eg. duty drawback and VAT refund does not increase the cost of production for export or exporting.
- Government will facilitate access to export credit and provide support such as cash payments, tax rebates and effective WTO compliant subsidies.
- Government will ensure efficient and effective duty drawback and VAT refund on all imported inputs for export production.
- Government will exempt key imported inputs from VAT, thus improving competitiveness of producers for both the domestic and international markets.
- Government will facilitate the establishment of efficient free multi-purpose zones to enable quick and effective movement of imported inputs and finished exports through the ports, combined with additional fiscal incentives to lower costs and support efficient logistics for exporting.
- Government will provide a system of inward processing under bond to enable producers to obtain up-front duty and VAT-exempt imported inputs. Producers will pay any duty and VAT due on that proportion of inputs to production sold on the local market.
Policy Objective: Policy Prescription
The cashflow cost to traders and producers of holding import inventories increases prices to consumers and producers. To lower the cashflow burden, and therefore cost, to producers of holding import inventories. Government will facilitate the operation of an efficient computerised bonded warehouse system with effective inventory control, general security and adequate penalties against malpractice to enable producers to hold stock of imports and only pay applicable taxes when goods are actually used or sold.
The Government’s twin strategies of export-led industrialisation and domestic market oriented industrialisation based on import competition rely critically on the smooth passage of goods and services across Ghana’s borders. In this regard, Government will lower costs and make it easier to trade in and out of Ghana.
Delays in clearance of goods can severely constrain international trade by raising the costs of imports for consumption and domestic production as well as exports.
To ensure speedy and efficient customs clearance and thus reduce costs.
Government will simplify procedures and establish a fair fee structure with the view to providing a ceiling fee. Government will ensure inspection companies provide training for Customs Officers in order to ensure that they can undertake the role of valuations, risk management and inspections when returned to CEPS overtime. Government will ensure compliance with the WTO Valuation Agreement.
The provision of efficient and effective cold chain and cargo storage facilities are vital for perishable products and high value exports.
To provide adequate cold chain and cargo storage facilities to promote the exports of perishable products and high value exports from Ghana.
Government will encourage private sector investment in constructing and operating storage and cold chain facilities, on commercial basis, from the production point to the airport. Government will promote competition in airport cargo handling services, to ensure efficient and cost effective handling of all goods at the airport.
Delays at the ports are a serious constraint to competitive production for both domestic and international markets. Such delays raise the price of imports to consumers, raise the cost of inputs to production and increase the cost of exports.
To ensure the provision of adequate and efficient services and facilities at the ports and thereby reduce the time and cost of doi ng business.
Government will facilitate the provision by the private sector of well organised container terminals with security, equipment, effective operators and computerised tracking. Government will withdraw from port operations and act as landlord and regulator to allow the private sector to operate effectively.
Policy Context: Policy Objective
Ghana is ideally situated to facilitate transit trade to neighbouring countries. To improve transit facilities, making transfer of goods through Ghana cost-effective, safe and secure and thus making Ghana the hub of West African trade.
Government will put in place measures that ensure easy transit through Ghana, without leakage into the local economy. Government will create a Free Port.
Technical Barriers. Sanitary and Phyto-Sanitary Measures Applicable To Imports
Applying standards on imports is vital to ensure that imported products meet the national health, safety, environmental and technical requirements. Application of such standards should not result in undue costs to consumers and producers.
To enforce national health, safety, environmental and technical standards. To ensure enforcement of these standards does notresultin undue delays or costs. Government will put in place measures for speedy and cost effective assessment of imports for compliance with national standards within set time limits.
Technical Barriers and Sanitary and Phyto-Sanitary Measures Applicable to Exports
Ghanaian exporters have an obligation to meet the standards set by other countries if they are to successfully trade in these markets.
To ensure that technical as well as sanitary and phyto-sanitary regulations do not constrain the export potential of Ghana.
Government will work with exporters to assist them in identifying and complying with international standards required by selected export markets. Government will ensure that adequate inspection facilities are provided at exit points to facilitate exports.
Government will systematically identify, for key current and potential export products, any technical barriers and put in place measures to reduce or remove such barriers through strategic market access programmes, multilateral for a and seeking technical assistance as appropriate.
Government will actively participate in international standards setting to influence future standards so that such standards do not become barriers to Ghana’s exports. This will also provide early warning to exporters in Ghana to enable them prepare and adjust to new standards.
Export finance facilities such as export credit, export insurance and export guarantees are essential to encourage producers to export and achieve the goal of export-led industrialisation.
To Ensure Availability of Affordable export Finance Facilities
1. Government will provide concessionary export finance facilities to the non-traditional export sector to increase access to, and lower the cost of finance for exports.
Enhancing Production Capacity for Domestic and Export Markets
Export-led and domestic market-led industrialisation depend primarily on developing supply capacity. It is therefore imperative for Ghana to develop sufficient and competitive production capacity to take advantage of market access opportunities. The Government wi 11 identify and target specific sectors for development on the basis of export potential, domestic market requirements, increased employment and income for disadvantaged groups such as women, rural communities and the poor.
Mobilising domestic and international resources for production, especially for value-added products, is essential to developing national supply capacity.
To encourage both domestic and foreign investment in productive sectors throughout Ghana. To increase the size and number of productive enterprises, especially those in value added sectors. To enable entrepreneurs with limited or no collateral, but who are low risk investors, to access formal credit for investment and working capital. Government will provide a macroeconomic environment conducive to productive investment, with price and exchange rate stability and low interest rates.
Government will actively encourage and promote both domestic and foreign investment through identification and promotion of strategic investment projects, especially those with export potential. Government will facilitate the provision of long term concessionary investment finance facilities to groups currently excluded from, or with limited access to, credit. This will include Micro, Small and Medium Enterprises (MSMEs), exporters, women and rural entrepreneurs and will ensure that the benefits of trade are not only enjoyed by the established and urban segments, but all segments of Ghanaian society.
Government will facilitate the provision of support to strategic productive sectors based on clear and transparent criteria. This will be private sector led with Government providing the necessary stimulus as required. Government will facilitate and support the establishment of credit reference agencies.
Inputs to Production
Policy Context: Access to competitively priced inputs to production is essential for developing supply capacity for both domestic and export markets. Domestic production of inputs at competitive world prices can be an important source of employment and growth.
- To improve competitiveness of products, and increase export potential.
- To encourage value-addition and increase employment and growth throughout the supply chain.
- To prevent enterprises with dominant market positions from colluding or fixing prices of inputs
- To the detriment of competitive production, thus limiting productive growth and exports.
Sectoral Development- Information and Communications Technology (ICT). Government will move towards the liberalisation of the petroleum, sector within the context of the National Energy Policy. As a last resort, Government will selectively intervene in farm gate prices of strategic products to stabilise prices for consumers and producers who are vulnerable. Government will encourage downstream processing to increase demand for primary production. Government will develop measures to promote all year round production to increase earnings and stabilise supply. Government will support and strengthen farmer based organisations to improve the bargaining position of producers and reduce the potential for exploitation.
Encouraging Domestic Trade
Considerable proportions of domestic trade are undertaken on an informal basis which limits the scope for growth, development and efficiency gains.
To bring traders into the formal sector, broaden the tax base and enable micro and small traders to access formal institutional support to expand their businesses.
Government will improve the speed and efficiency of business registration and licensing through computerisation and simplification of procedures. Government will introduce lower tax rates for micro and small traders so that taxation is not a disincentive to formalising business.