- Current earnings only around US$5m
The National Export Development Strategy (NEDS) has set an ambitious target of increasing salt production for industrial use in a bid to add more than US$1.2billion to Non-Traditional Exports (NTEs) revenue by 2029.
Data from the Ghana Export Promotion Authority (GEPA) show the country’s export revenue from salt stood at more than US$5million and US$4.7million in 2017 and 2018 respectively. This the Authority wants to increase – to US$12million at the end of 2020 as part of the export strategy.
The strategy document states that the country has the capacity to produce between 2 to 2.5 million metric tonnes of salt annually. However, currently only about 10 percent of that is produced; mainly for household consumption in both the domestic and export markets.
The NEDS aims at developing the salt industry to supply and move it away from the long-standing practice of producing for human consumption to producing for industrial use. It wants to leverage the large un-met demand for the product in the West African market through trade deals; such as the existing Ecowas Trade Liberalisation Scheme (ELTS) and the African Continental Free Trade Area (AfCFTA) that will begin in January 2021.
Some of the strategic interventions that the policy seeks to implement in achieving the target include: assisting firms to develop policies that enhance competitiveness of the industrial salt sector through cost reduction strategies; promoting both local and foreign investments in industrial salt production; and providing incentives and cost-reduction packages for companies that venture into manufacturing industrial salt.
Other interventions include promoting Ghanaian industrial salt in the sub-region and other African markets, and deploying policy instruments to facilitate and ensure integration of outputs from an expanded industrial salt industry to the input requirements of petrochemical and bauxite-aluminium industries.
The main challenge facing the salt industry is the highly informal structure of the market, which leaves exporters frustrated as they have to deal with a few individual suppliers who are unable to produce to meet demand; and fluctuations in the price of salt locally mean it is sometimes about three times higher than the international price.
Ghana’s main competitor as a salt supplier in the West African region is Senegal – the only other commercial level salt producer in West Africa, producing about 400,000 tonnes per year. Globally, Brazil, Australia, Namibia and others export at least 500,000 tonnes per year to the largest West African salt market – Nigeria. Salt on the sub-regional market is sold as raw, crystal or refined. Currently, demand for all types of salt is higher than supply.
About the NEDS
The Ghana Exports Promotion Authority (GEPA) is set to invest over US$600million over the next ten years in a bid to diversify the economy through Non-Traditional Exports (NTEs).
The NEDS is developed around three main strategic pillars which seek to: expand and diversify the supply base for value added industrial export products and services; improve the business, regulatory environment for export; and build and expand the required human capital for industrial export development and marketing.
The first strategy seeks to promote, at least, 10 FDIs annually into the large-scale industrial exports sector; upgrade and directly support expansion of 20 majority Ghanaian-owned industrial exporters to attain global status; upgrade and directly support expansion of 100 middle-bracket exporters to attain top-bracket NTE earning status; and upgrade and directly support expansion of 200 emerging district level export companies to attain middle-bracket NTE earning status.
The second strategy will review and streamline regulatory and documentary requirements for export, and institutionalise effective public–private sector engagement mechanisms for export development; and the third strategy seeks to focus on upgrading the Ghana Export School to a tertiary institution status, and decentralise faculty to regional level with district coverage.
This will introduce industrial export modules and practical internship in secondary and tertiary institutions to achieve mindset transformations toward exports. It will also deepen the decentralisation process to empower institutions at district level, by providing them the needed resources and making them responsible for delivery of results for industrial export development.