By Wisdom JONNY-NUEKPE
The African Centre for Economic Transformation (ACET) has expressed worry over the country’s dipping export competitiveness, which it says has tumbled by 8.4 percentage points over the last two decades and is still declining.
ACET, in its Country Economic Transformation Outlook (CETO) document for Ghana, mentioned that exports remain concentrated in moderate- and low-complexity products, reflecting limited diversification and export sophistication.
The CETO document, which is an in-depth assessment of the state of economic transformation in Ghana, aims to measure progress and identify challenges impeding further gains.
According to the report, weak value addition and minimal processing have hindered technology upgrading, slowing industrial progress.
Indeed, the country’s current export basket – 94 percent – has low technology content which has not changed significantly over the last 30 years.
ACET says the need to expand and deepen non-traditional exports and higher value products is crucial for competitiveness and economic resilience.
Evolution of export competitiveness
According to the report, raw materials constitute about 51 percent of Ghana’s exports while intermediate goods make up 43 percent.
The lack of significant processing and value addition in the export sector has resulted in minimal transformation into technology-intensive and competitively priced sectors, highlighting the need for diversification.
But ACET maintains that Ghana’s export structure still reflects colonial patterns due to path dependence, whereby historical comparative advantages continue to shape current dynamics.
“This concentration on a few primary commodities – namely gold, cocoa and more recently petroleum which together account for over 75 percent of total exports – demonstrates limited diversification and ongoing challenges in expanding beyond these primary products. Moreover, Ghana’s export competitiveness has been low, declining by 8.4 percentage points over the last two decades,” the report noted.
Given the challenges, ACET said, efforts to increase the share of technology-intensive, non-extractive exports have not shown results and the slow pace of diversification underscores the current export structure’s unsustainability.
Although there have been some shifts in export markets, with increased exports to other African countries – particularly within ECOWAS, Ghana still faces challenges in expanding beyond its traditional export destinations.
The report noted that since 1980, Ghana’s goods export value increased from US$1.2billion to US$20billion in 2020. However, the country’s export structure has been slow to diversify.
“The only way out is to diversify and expand into high-value products export. That is non-negotiable for making progress going forward,” the report indicated.
