Ghana may soon ban the export of all raw materials from the country in order to promote the export of value-added products, That was the message from Ghanaian senior minister, Yaw Osafo Maafo, during a keynote address at the recent launch of the Ghana Indian Trade Advisory Chamber in Accra. Maafo said this would form part of initiatives proposed under the “Ghana beyond aid” agenda. “It’s a laudable desire to want to export processed goods rather than raw materials but Ghana’s ability to actually carry it out has to be called into question,” said Africa House market access and strategy director, Duncan Bonnett. “If you don’t have economies of scale to process raw materials it makes it difficult to justify such a move.” He told FTW Online that this had been tried before in a number of countries in Africa, but infrastructure challenges and the cost of setting up these downstream sectors had made it difficult to carry out. Bonnett pointed out that the raw materials primarily exported by Ghana – such as gold, crude oil, cocoa beans and cashew nuts – were not only difficult to move downstream but were also difficult markets in which to compete as they were all already part of global supply chains. “For example, gold is one of the sectors Ghana would likely want to process into value-added products, but it is unlikely to be competitive in this sector as India is already established as a global leader in gold finished products,” he said. “The same can be said for petroleum as we already have global refining capacity; in fact we have too much as it is.” He said that assuming the country was able to create the processing capacity to trade only in value-added goods, they would also have to convince end-users in markets such as Europe and the US to actually buy into their products, which would not be easy. Bonnett noted that other infrastructural shortfalls would also impact the degree to which the West African country could carry out such a policy. “Traditionally, or at least in the last 15 years or so, the country hasn’t had the power generation to make the change to process raw materials at the levels that would be necessary for it to generate sufficient revenue,” he added. “However, this doesn’t mean that it can’t be done. Ethiopia is currently attracting a lot of investment into processing goods across the value chain, so it is very possible as long as you do it correctly.” He pointed to the Democratic Republic of Congo’s export ban on copper and cobalt as a failed example of trying to execute something similar. All it did was lead to stockpiling of the raw materials.
INSERT
