TRALAC - Trade Law Centre

Ghana: AGOA exports under pressure

Monday, 01 June 2009

Source: MyJoy (Online) (Ghana)

Ghana's exports to the US under the African Growth and Opportunity Act (AGOA) fell last year and continued to fall Into the first quarter of this year.

Ghana's total exports under AGOA to the US market stood at US$42.2 million In 2008, which was a 38.4 percent decline from the US$68.6 million recorded in 2007.

From January to March this year, the country's total value exported under the scheme was US$2.5 million, representing a momentous 86 percent decline over the US$18.1 million recorded In the first quarter of 2008.

Ghana's main export categories to the U.S. consist of forest products, agricultural products, energy-related products, minerals and metals, and textiles and apparels.

The rest include chemicals and related products, footwear, machinery, transportation equipment, and manufactured goods and electrical products.

According to trade data released by the USAID office in Accra, Ghana's exports of footwear contributed the highest decline in 2008 of 75 percent. Others were minerals and metals, forest products, chemicals, transportation equipment, and textiles and apparel which fell by 56, 51, 42, 12 and four percent respectively.

Slight increases of 19 percent, 10 percent and 30 percent were recorded for agricultural products, manufactured products and machinery exports respectively.

AGOA is a US-African arrangement that allows AGOA-eligible countries to export duty and quota free to the US market.

The US Department of Commerce identified the impact of the global crisis as the major reason why many AGOA eligible countries could not do well in 2008.

"The global economic recession affected many African countries' exports in 2008 as demand in the US was hard hit," the document prepared by the US Department of Commerce said.

"The countries also lack ability to take up the full potential offered by AGOA," it added.

Ghana in various instances has not been able to produce to meet the quality standards set for the US market. Among them are stringent rules of origin and health standards.

The exporters also lack capacity, expertise, information and coordinated efforts to tap the full potential of AGOA.

Ghana's performance in the first quarter this year compared to previous periods shows that exports of footwear continued to fall, at 74.6 percent; minerals and metals fell 56.1 percent while forest products fell 51 percent. Chemicals, transportation equipment, and textiles and apparels also fell 41.8, 11.7 and 3.9 percent respectively.

The country's performance in the first quarter ranked 17th in AGOA exports, worse than the 12th position in the same period of last year.

Top-five AGOA beneficiary countries include Nigeria, Angola, South Africa, Chad and Republic of Congo, all oil-producing countries. Critics rubbish the true free-­market access intention under the AGOA because of this trend.

They hold the view that the US is just interested in securing the oil resources in the region through AGOA, and for that matter makes it difficult for non-oil products to enter its market.

Out of the total exports from sub-Saharan Africa to the US market in 2008, Nigeria accounted for 44.2 percent, Angola 22 percent, South Africa 11.6 percent and Congo accounted for 5.9 percent.

The share of Equatorial Guinea was 3.9 percent, Chad 3.9 per cent, Gabon 2.6 percent and all other countries in sub-Saharan Africa accounted for 5.9 percent.

Non-oil producing countries that placed higher than Ghana were Cameroon, Lesotho, Madagascar, Kenya, Swaziland, and Mauritius.

All trade between Ghana and the US stood at US$831.1 million dollars in 2008, made up of US$222.4 million exports from Ghana and US$608.7 million imports from the US.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Ghana's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.