By Joe JACKSON
If there’s one thing Ghanaians know how to do, it to remain calm in the face of looming drama—especially when it comes from ‘Abrokyire’.
Imagine being told that a new tariff, stamped with a fancy name like ‘Liberation Day’, might soon land on your exports to America.
You’d probably straighten your Woodin shirt, take a brief snooze, and then go right back to your fufu without skipping a beat. And that’s precisely what’s happening here in Ghana.
On April 2, the Trump administration dropped a diplomatic bombshell on—well, more like a firecracker—by proposing a 10percent ad valorem duty (to be paid by Americans) on good exported by just about everyone under the sun, and that, of course, included Ghana.
Of all things, they even added a dramatic flair, calling these the ‘Liberation Day’ tariffs (though critics say it’s more a ‘Liberation from Common Sense’).
One might think we may have been singled out with astronomically high rates or direct insults about our jollof rice. But no—President Trump’s folks cast their net wide, and Ghana got the same rate as everybody else.
Some other countries got a much higher rate than Ghana e.g. South Africa – 30percent, Ivory Coast – 21percent, Nigeria – 14percent, etc.
Trump was kind to Ghana!
At a flat 10percent import duty, Ghana somehow ended up with the lowest proposed tariff rate among African countries—because we’re apparently very polite traders.
Our existing tariffs on U.S. goods are low, so President Trump decided not to come at us too hard. Maybe he enjoyed our cocoa so much, he just couldn’t muster the energy for a bigger fight.
Let’s look at the numbers:
- Ghana’s 2023 total exports: US$25.99 billion
- Ghana’s 2023 exports to the USA: US$1.74 billion, about 6.69percent of the total
- Big chunk of that is crude petroleum—an impressive 70.7percent of all our U.S.-bound exports—yet ironically crude oil is exempt from the new tariff plan, slashed to a magnificent 0percent.
Are we losing sleep over that 10percent on non-oil products? Considering that the non-crude goods we ship off to Uncle Sam amount to about US$508.6 million, or roughly 1.96percent of our total exports, we can confidently yawn.
Sure, cocoa gets pinned with the 10percent levy, but given that cocoa is scarce globally these days, it’s not like chocolate-lovers are going to vanish or start munching on cassava just to avoid paying a bit more.
Ghana’s Cocoa: Let Them Eat Chocolate!
Speaking of cocoa, let’s chat about the star of Ghana’s agricultural stage. We all know that Europe is the largest consumer of our cocoa beans, and those folks across the Atlantic are serious chocoholics.
The sweet truth is that even when chocolate prices shoot up by 12percent to 15percent, the Europeans keep munching away. We can thank Dirk Van de Put, the chairman and CEO of Mondelez, for that little titbit.
He basically said that, in 2023, even with high prices, chocolate sales in Europe hardly dipped—maybe by 0.5percent at most. So, while a U.S. tariff might ruffle a few cocoa pods, it won’t exactly send Ghanaian cocoa farmers into panic mode.
Plus, cocoa is in short supply worldwide, and folks can’t suddenly conjure up new cocoa plantations in Antarctica. So, if Americans want to snack on chocolate bars, they’ll keep buying cocoa products from Ghana. It’s not like they can phone up the Martians and order cosmic cocoa from outer space.
Truce, Suspended Tariffs, and a 90-Day Ceasefire
For now, these ‘Liberation Day’ tariffs have been suspended for 90 days, which means we’re essentially in a time-out.
Maybe someone in Washington realized that waging a trade war in the middle of everything else going on isn’t the best idea. Or maybe they heard rumors that you do not stand between Ghanaians and their next plate of jollof, lest you face the wrath of an entire nation.
But even if the Americans storm back after this grace period—fists full of executive orders—the effect on Ghana’s economy will likely be teeny-tiny.
With oil exempt, cocoa thriving in a world of chocolate addicts, and the rest of our exports making up a small fraction of our total shipments, we’ll keep calm and carry on. We might shake our heads at the nightly news, but by the next morning, we’ll be back to business.
So, if you’re a Ghanaian exporter enjoying your kooko this morning and laughing at the headlines, you’re not alone. Our advice: Keep farming, keep drilling, keep shipping, and keep your sense of humor.
After all, when life gives you ‘Liberation Day’ tariffs, just turn on the radio, dance to some Fameye – Very soon, and wait for the next round of global drama to pass. We’ll be just fine.
>>>the writer is the CEO of Dalex Finance and a Fellow of the Institute of Chartered Economists Ghana
