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Ghana: Government's Effort to Increase Revenue Through Non-Traditional ExportsTuesday, September 30, 2014 > 08:48:52
Within the framework of the accelerated export drive, the Government of Ghana (GoG) through the Ministry of Trade and Industry (MoTI) has mandated the Ghana Export Promotion Authority (GEPA) to develop and promote services to enhance Non-Traditional Exports (NTEs) revenue, employment generation and socio economic development for the nation.
Ghana Export Promotion Authority (GEPA) is the National Export Trade Support Institution that facilitates the development and promotion of Ghanaian exports. GEPA was established by Act 396 in 1969 as an agency of the Ministry of Trade and Industry with the mandate to develop and promote Ghanaian exports. GEPA focuses on the diversification of Ghana's export base from the traditional export products of unprocessed minerals, cocoa beans, timber logs and lumber to non-traditional exports.
Currently, there are over 383 different Non-Traditional Export products and services categorised into four broad areas of Agricultural, Processed and Semi Processed, Handicrafts and Services. GEPA's clientele include over 3000 registered private sector exporting companies organised into 17 Export Product Associations. GEPA relates to these clients both on individual corporate basis and as groups and association, and also acts as an interface between these exporters and other public organisations.
As the cardinal body mandated to spearhead the development and promotion of non-traditional products, the Ghana Export Promotion Authority has once again taken up the initiative to bring to fore the practical steps of streamlining and the global strategic positioning of professional services from Ghana. In line with this global positioning of professional services and the significant impact of the sector in the export portfolio of Ghana, GEPA in collaboration with the commonwealth secretariat, developed a National Services Export Strategy.
Services Export Department
The service export department was established in January, 2007 as a unit and is charged with the responsibility to co-ordinate the Authority's collaborative efforts with other stakeholders to promote the services export sector.
What Is A Service
A service is the non-material equivalent of goods. It is the economic activity that does not result in ownership and therefore differentiated form the provision of physical goods.
Export Of Services
A service is exported when a foreign customer purchases it. Export services; therefore occur when work or services are rendered beyond the shores of the country, or when foreigners patronize service products rendered in this country. Generally, service delivery has been categorised into four distinct areas;
1. Cross Border: Only the service crosses the border from one country to another.
2. Consumption Abroad: The service is consumed by nationals of one country in another country where the service is supplied.
3. Commercial Presence: The service provider crosses the border to have a commercial presence abroad through which the service is provided.
4. Movement Of Natural Persons: Service supplier crosses the border into customer's market to provide a service temporarily.
Some tradable services that can be harnessed for export:
- Business Services (communication and Professional Services).
- Constructional and related Engineering Services.
- Distribution Services.
- Educational Services.
- Health Related and Social Services.
- Financial (Insurance and banking) services.
- Tourism and Trade related Services.
- Recreational, cultural and sporting Services.
- Transport Services.
The above list reveals that opportunities abound in the service sector and can be strategically tapped for export.
Market Opportunities In Services
Ghana is well positioned in terms of comparative advantage and to take advantage of the market opportunities in the services sector. The following are some of the opportunities available for consideration:
(a) Back Office Operations and Business Processing Outsourcing ranging from accounting to call centres and medical transcription which create value-added jobs and foreign exchange earnings.
(b) Education Services: Ghana can leverage its acclaimed education system particularly at the tertiary level and for new types of specialised courses and training programmes
(c) Medical Tourism: High quality medical and dental care, available at lower cost than in developed countries. Examples are the Cardiothoracic Centre, Reconstructive Plastic Surgery Centre and the Radiotherapy Centre which have become the nucleus of an integrated medical hub for attracting patients from abroad who would combine tourism with medical or dental care.
(d) Private Sector Consultancy: Exports of architecture, engineering, surveying and planning services have considerable potential in the global market;
(e) Financial Services: Financial institutions in Ghana can niche opportunities and explore the possibility of providing financial products for Ghanaians living and working abroad.
There are myriads of other services that can be harnessed.
Economic Benefits Of Service Export
- Foreign Exchange Earnings
- Employment generation for both skilled and semi skilled labour
- Environmentally speaking service firms create "clean" jobs without the usual degradation of the ecosystem
- Once telecommunication technologies are incorporated, service firms can operate with a dispersed telecommuting work force for much of their operations.
- Service export generally cascades into the country's poverty eradication strategy, since all the benefits afore mentioned are likely to improve the standard of living of the people
The Services Sector In Ghana
Ghana's own service sector is of no exception to the services export phenomenon and provides good prospects for the growth of the Ghanaian economy.
The sector is characterised by a variety of services that include construction and allied engineering services, information technology, business services, freight forwarding services, banking services, health care education and tourism among others. Ghana's potential and competitive advantage also extends considerably into the ECOWAS and other markets.
Other characteristics of the sector in Ghana include smallness of firms (usually no more than five persons), inadequate access to information and communication technologies, insufficient funding schemes to support expansion programmes, insufficient information and knowledge on international bidding procedures, among others.
Government Policy Direction And The Way Forward
In recognition of the growing importance of services trade in foreign exchange earnings, job creation and GDP growth, the Government of Ghana is taking steps to mainstream services export into national trade policies with the view to designing a practical strategy that will link Ghana to the global services supply chain. Among other things, Ghana has acquired a National Services Export Strategy that provides the blueprint for the development and promotion of the services sector as an exportable offer to augment foreign exchange earnings, job creation and GDP growth efforts. The necessary awareness must be created.
The following steps are key to the growth of the sector:
*Create the necessary awareness at all levels
*Identify and remove constraints in the sector and
*Undertake specific sector promotions
The potential of the services sector to become a vehicle for Ghana's economic development cannot be overemphasized. Efforts at all levels must therefore be harnessed to ensure the mainstreaming of services exports into national trade programmes to enhance exchange earnings, create jobs and generally impact GDP growth.