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Ghana Minister of Trade and Industry, Alan Kyerematen spoke of the African Continental Free Trade Area and its potential benefits for American companies during pre-recorded comments to the WTC Delaware. | PHOTO COURTESY OF WORLD TRADE CENTER DELAWARE[/caption]
WILMINGTON — With eyes to the future as Ghana hopes to continue industrialization, Delaware and African companies met virtually last week to explore business relationships and to learn more about exporting and importing needs at a hybrid event hosted by World Trade Center Delaware.
Roughly a dozen Ghanian retailers, real estate developers and manufacturers joined officials from Delaware companies ranging from bank representatives, trade insurance firms, and more, to discuss how to overcome challenges with foreign trade.
In the past 40 years, Ghana has emerged as a triumphant example of stability in Africa with significant gains in its economy. The country has held peaceful elections since 1992, and in the late 2010s it was reported to be on track for one of the world’s fastest-growing economies with oil and cocoa as its natural bounty, serving as a world’s top producer for the latter. The country is also Africa’s second largest producer of gold, as well as a provider of iron and lithium.
That economic growth has continued into 2022, although inflation has recently hit a record high of 39%. In September 2022, Bloomberg reported that Ghana’s economy grew faster than expected that quarter, expanding 4.8% thanks to its manufacturing and cocoa production. But the country’s Minister of Trade and Industry in Ghana, Alan Kyerematen, has been advocating for a greater push for industrialization, and thus opening its borders for international trade partners.
“We have to be energetic about this, because trade and industry are two sides of the same coin,” Kyerematen said in a recorded statement for the WTC Delaware event. “Our ambitious and comprehensive program called Industrial Transformation will help us deal with unemployment and help our foreign exchange, supporting our currency.”
Ghana is also a member of the African Continental Free Trade Area, an agreement that reduces tariffs on most products and services ranging from five to 13 years, depending on the country’s involvement and the product type. With 43 parties, it is the largest free-trade area in the world and the World Bank estimated it could boost the incomes of nearly 70 million people, and generate $450 billion in income by 2035.
“Our founding fathers had a dream of uniting our country to harness the political unity of the continent. To a larger extent, we haven’t achieved that,” Kyerematen said. “But to unite our country economically, we could bring together a population of 3 billion people and have a combined value of $3.12 trillion dollars. Can you imagine the market strength of that single market? That is why there is no better time than now for foreign investments — if you locate a manufacturing facility in Ghana, you can export your goods to the entire continent at an agreeable cost.”
Volkswagen AG and Nissan Motor Company have both inked deals to open auto assembly factories in the West African country. In April 2022, Nissan commissioned an assembly plant in Tema in the Greater Accra Region, making it the largest auto plant in the country, producing 31,000 vehicles per year.
In addition, Ghana’s energy sector may have opportunities for public and private entities, as it’s projected that the country will need to procure an additional power generation of 225 megawatts in the next four years and another 200 megawatts by January 2025. The government is heavily involved in the energy sector, and Deputy Energy Minister Mohammed Amin Adam noted that there are plenty of opportunities for investors.
“The plan is to invest 1,300 megawatts in our renewable energy, so there is still an opportunity for investors,” Adam said in a pre-recorded statement. “We have discovered success with discounts and incentives have also worked very well.”
In Delaware, programs and financial and trade insurance partners can also offer benefits for American companies to export to Ghana. The U.S. Small Business Administration Office of International Trade works with banks to offer export programs, such as Export Express, which offers a loan $500,000 or less, flexible to some needs. The SBA also offers an international trade loan that can offer purchase or refinance of debt or business acquisition up to $5 million.
Fulton Bank of Delaware has worked with American companies in exporting, through working with capital, loans, contract sales and obtaining a letter of credit, as well as working with foreign currency accounts.
‘We’re pretty much able to send money anywhere internationally that an American company might need. We also have relationships with correspondent banks throughout the world,” said Janet Dougherty, a commercial banking leader at Fulton Bank. “A few years ago, I was introduced to a company from Ghana a few years ago that was manufacturing a product and selling it here. We were able to assist him with a bank account. But you do have to be here to do that, as we can’t do that remotely.”
