Ghana fell to the 5th position from 2nd in the third edition of the Stanbic Bank Africa Trade Barometer (ATB).
This show’s that Ghana’s trade attractive and openness has taken a nose dive.
Although the country improved from position 10th to 7th in the Stanbic Bank 3-Year Quantitative Trade Barometer (SB QTB) ranking, this was not enough to maintain its overall position relative to the other markets.
South Africa maintained its position as number one in terms of trade infrastructure development and attractiveness. In all, 10 countries were assessed.
Ghanaian businesses continue to face significant obstacles to trade
According to the report, Ghanaian businesses face significant obstacles in global trade, including import/export bans, tariffs, customs requirements and paperwork.
For example, 41% of surveyed businesses feel that customs and trade regulations represent a major or severe obstacle constraining their ability to engage in trade with other African countries.
While the government collaborates with fellow African countries through membership in Africa Continental Free Trade Agreement (AfCFTA) where preferential tariff regulation exists, perceived difficulties have increased over time. This emphasises the importance of enhanced government support through policies that prioritise local businesses, as tax burdens tend to be higher for local businesses compared to foreign businesses, in light of the government’s focus on attracting FDI.
Moreover, the ongoing challenges of inflation and currency depreciation against the US dollar add additional cost burdens to Ghanaian businesses, as tariffs and customs requirements fluctuate significantly during the transit of goods and services, resulting in unexpected tariff price increases when imported goods arrive in Ghana.
Exporters, importers remain bullish n increases cross-border trade
According to the report,exporters and importers remain bullish on the prospect of increased cross-border trade.
“Imports are an integral source of inputs for Ghanaian businesses. A relatively large share (37%) of businesses import their inputs. These importers primarily operate in the consumer goods sector and purchase inputs from international wholesalers”. It stated.
The report added that the relative importance of imports for Ghanaian businesses reflects data at the aggregate country level, where the value of imports accounts for roughly 25% of Grss Domestic product.
Ghanaian importers primarily source their inputs from Asian countries; and particularly favour imports from China. 44% of importers in our sample import inputs from at least one Asian country; and 38% of importers import from China.
Access to finance remains a challenge
The report said cash is widely used for payments in Ghana, and access to finance remains a challenge.
“Cash, EFT and international transfers are the preferred methods of payment for Ghanaian businesses for cross-border transactions. The majority of transactions are facilitated through cash (28%), largely driven by small businesses (31%). Insights from thought leaders indicate that the constrained availability of foreign exchange has a substantial impact on businesses, prompting them to resort to cash transactions for facilitating payments beyond the formal banking system.”
It continued that big businesses and corporations tend to utilise a variety of payment methods, including EFTs and international transfers—which facilitates the direct movement of funds between two banks located in different countries.
The trend is similar with regards to cross-border purchases. Larger businesses predominantly rely on international transfers and EFTs for procuring goods and services across borders.
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