The recent U.S. decision to impose a 10% tariff on Ghanaian exports has exposed weaknesses in Ghana’s export strategy, according to the Minority Caucus in Parliament. The group warns that the tariff could severely impact key industries, leading to job losses and financial instability for exporters, particularly those in the apparel, cocoa, and yam sectors.
The Minority has strongly criticized the government’s lack of a decisive response to the tariff hike. The measure, introduced by former U.S. President Donald Trump, is reportedly a reaction to Ghana’s 17% average tariff on American imports. While it remains uncertain whether Ghana’s participation in the African Growth and Opportunity Act (AGOA) will be directly affected, the economic consequences are already a major concern.
Under AGOA, Ghanaian products, including textiles, agricultural goods, and manufactured exports, have enjoyed duty-free access to the U.S. market. However, the new tariffs will increase the cost of these goods, reducing their competitiveness in the American market.
Industries at Risk
•Apparel Industry: Over 5,000 young workers depend on Ghana’s garment exports to the U.S. The tariff will raise costs, making it harder for these businesses to remain competitive, potentially leading to job cuts.
•Cocoa Exports: Although raw cocoa beans enter the U.S. duty-free, processed products like cocoa powder and paste—which account for about 30% of Ghana’s cocoa exports—will be affected by the tariff. This discourages value addition, a key strategy for increasing revenue from cocoa.
•Yam Exports: Yams, a major Ghanaian export to the U.S., currently benefit from AGOA. The additional 10% duty could reduce their market appeal, making them less competitive.
The Minority Caucus blames the government for failing to diversify export markets, leaving Ghana overly reliant on U.S. trade policies. They argue that while the previous New Patriotic Party (NPP) administration promoted intra-African trade through the African Continental Free Trade Area (AfCFTA), the current National Democratic Congress (NDC) government has not prioritized these efforts.
“We have yet to see any structured plan to help exporters navigate this crisis or expand Ghana’s production base,” the Caucus stated.
Despite initiatives like One District, One Factory (1D1F), which has increased exports of iron rods, ceramics, and plastics to ECOWAS countries, the Caucus believes Ghana’s broader export strategy remains weak. They also pointed out that government funding for AfCFTA implementation has been insufficient, reflecting a lack of commitment to economic resilience.
Urgent Measures Proposed
To mitigate the impact of the tariffs, the Minority Caucus is urging the government to take immediate action:
1.Diversify Export Markets: Accelerate the implementation of AfCFTA to strengthen trade within Africa and reduce dependence on the U.S.
2.Support Exporters: Provide financial assistance, training, and market intelligence to help businesses adjust to new trade conditions.
3.Encourage Product Diversification and Value Addition: Shift focus from raw material exports to processed goods, which offer greater profitability and competitiveness.
4.Engage in Diplomatic Talks: Hold negotiations with the U.S. to assess the impact of the tariff on AGOA and push for a revision or removal of the duty.
5.Clarify Policy Direction: Present a clear strategy on how the government plans to navigate this economic challenge and safeguard Ghanaian businesses.
The Minority warns that failure to act swiftly could deepen the economic crisis, making it even harder for Ghanaian exporters to compete on the global stage.
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