EU Statement at the Trade Policy Review of the Republic of Ghana, 21 June 2022

(Source: EEAS)

EU Statement delivered by Deputy Permanent Representative, Hiddo Houben

Thank you, Mr Chairman. I would first like to welcome the Delegation of Ghana led by His Excellency, Hon. Herbert Krapa, Deputy Minister of Trade and Industry. I would also like to thank the WTO Secretariat and the Government of Ghana for their reports and extend our appreciation to the Discussant, Mr Etienne Oudot de Dainville from France for introducing us to Ghana’s trade policy review today.

Since the last Ghana TPR in 2014, Ghana has pursued a growth strategy that has led to impressive improvements in Ghana’s economy notably when looking at income per capita or the Human Development Index.

In 2018, the Ghanaian President Mr Nana Akufo-Addo launched the “Ghana Beyond Aid” that aims to transform the structure of the economy from dependence on production and export of raw materials to a value-added industrialised economy, driven primarily by the private sector. Under his leadership, Ghana continues to position itself as a pole of stability and democracy in West Africa, and indeed, on the continent at large. This is highly appreciated by the EU.

According to the Secretariat report, over the review period, Ghana experienced modest to strong economic growth, with macroeconomic performance improving in 2017 to 2019. In 2020, the economy held up comparatively well, despite the worldwide COVID-19 related lockdowns, closures of borders and impact on businesses. However, the mitigation efforts on the impact of the pandemic that the Government adopted aimed at supporting vulnerable households and businesses, came at the expense of record fiscal deficit and public debt that led the IMF to warn Ghana last year that it was at high risk of debt distress.

The EU remains Ghana’s main trade and investment partner. We have signed and ratified an interim Economic Partnership Agreement (EPA), which entered into force in December 2016. The EU is committed to strengthen its trade partnership with Ghana, to provide a solid, stable and transparent framework for increased, sustainable trade and investment. In this context, the EU commends Ghana’s commitment to work towards ensuring the sustainability of cocoa production – this being a very important component of our bilateral trade.

EU – Ghana cooperation is vast and goes beyond trade. The EU has been a reliable development cooperation partner for Ghana. EU development assistance to Ghana amounted to 323 million euros over the period 2014-2020, covering governance, productive investment for agriculture, employment, and measures in favour of the civil society, and support to the private sector, in particular the MSMEs whose development constitutes a base for the growing exports base.

The EU encourages Ghana, as current ECOWAS Chair, to consolidate regional integration by lowering further the barriers to the free movement of goods and services in the region. Since January, Ghana has taken a 2-year non-permanent member seat at the UNSC, where it has played its rightful role in condemning the Russian invasion of Ukraine and voted positively for the UN General Assembly resolution of 2 March. This is much appreciated by the EU.

Ghana is signatory and host to the African Continental Free Trade Area (AfCFTA), whose objectives are to create a single market for goods, services, facilitated by movement of persons, in order to deepen the economic integration of the African continent and lay the foundation for the establishment of a Continental Customs Union at a later stage. The EU is ready to work closely with Ghana to ensure that the private sector takes advantage of the implementation of the AfCFTA and the interim EPA with the EU.

The Secretariat report highlights that business climate remains challenging for foreign investors in Ghana. There is a need to improve and strengthen an enabling environment for attracting private sector investment in many sectors. In particular, the lack of transparency in taxation and customs procedures and high logistic costs reduce the attractiveness of the country as a platform for operations in West Africa.

Foreign investors have expressed concerns regarding respect for contract sanctity, including unilateral changes to contract terms and forced contract re-negotiations with the state-owned enterprises. Companies are confronted with multiple regulatory agencies with overlapping and sometimes duplicating functions and their fees, taxes and charges. Concerns have been raised over the local content policies adopted by the Government in many areas including strategic sectors such as petrol downstream distribution, maritime and logistic services. The importance of timely WTO notifications has to be highlighted as well.

The EU has submitted written questions in advance, and would welcome clarification, notably on:

  • The Ghana’s investment code that currently excludes foreign investors from participating in key economic sectors.
  • The completion of the review of the Ghana Investment Promotion Centre (GIPC) Act, notably the minimum capital requirements for joint ventures with a Ghanaian partner, which are currently high and may act as disincentive against attracting more foreign investment.
  • The Government plan to review the system of tax collection – currently it is complex for companies to file complaints; the objection process is very lengthy and the outcome unclear, making it unattractive to make investments in Ghana.
  • The obstacle to trade caused by the Ghanaian customs practices and port infrastructure. Officials have introduced risk-management approaches; however, the majority of imports are still subject to inspection on arrival.

The EU strongly hopes that this review exercise will help Ghana in defining the policy orientations and measures to reach the country’s potential. Thank you, Mr Chairman.

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