Ghana risks losing more than US$1.2billion in export revenues to the United States over the next five years, unless something dramatic is done about the situation, Emerging Markets Advisory (EMA) Limited has warned.
This according to the EMA would be the fallout from the 10 per cent tariff imposed on exports from Ghana into the United States of America government.
Consequently, it has called for a new policy framework that will seek to strengthen the country’s regional integration and promote balanced economic growth.
Speaking at the Association of Ghana Industries (AGI) and EMA breakfast meeting in Accra on Monday, a Senior Partner of EMA, Dr Abudu Abdul-Ganiyu said despite the fact that the US constituted barely 2.4 per cent of the country’s total exports, the aggregate loss could harm be dangerous.
“If the 10 per cent tariff persists, then Ghana could suffer over one billion dollars in lost export revenue to the U.S. market,” he said.
Dr Abudu Abdul-Ganiyu, Senior Partner at EM Advisory, speaking after a breakfast meeting with the Association of Ghana Industries (AGI).
He noted that the issue must not be viewed only from the perspective of Ghana, but the whole of Africa,
To this end, he said the continent would have to be intentional about intra-African trade.
“African governments must come up with a new policy framework that will seek to strengthen regional integration and promote balanced economic growth across the continent,” he said.
This policy, according to him must focus on collaborative trade frameworks and coordinated infrastructure development to address long-standing disparities between developing economies and more advanced markets within Africa.
Mr Isaac Agyiri Danso, also a senior partner of EMA, emphasised the need for Ghanaian exporters, particularly those with niche markets in the United States (U.S) to adapt quickly to protect their revenues and long-term viability.
According to him, although the U.S market accounted for a relatively small percentage of Ghana’s exports the value of these exports was substantial and crucial in supporting Ghana’s emerging industries.
“While U.S. imports account for only 2.4 per cent of Ghana’s exports and about $470 million annually; that still represents a significant revenue stream for some of our emerging industries,” he said.
“For entrepreneurs whose main market is the U.S, these tariffs could be devastating,” Mr Danso added.
He warned that the demand elasticity of the U.S. market meant that even a 10 per cent price increase if the cost of tariffs is passed on to consumers, it could cause demand to fall by more than 20 per cent.
However, he noted that such shifts could hit small Ghanaian exporters especially hard.
The realignment of global trade routes and increased competition from countries like China, which may redirect products originally destined for the U.S. to markets like Ghana, could pose serious risks to local manufacturers.
“If Chinese goods start flooding our markets as a result of U.S. trade restrictions, our domestic industries may not survive the competition,” he warned.
Additionally, Mr Danso said there was the need to diversify its export markets and form international partnerships to help Ghanaian firms mitigate risks and remain competitive.
BY CLIFF EKUFUL
