Ghana has received support from development partners such as the World Bank and the regional economic trade union, ECOWAS, to start the process of implementing export and import indices, effective January, 2019.
The move has been necessitated by the assessments done during continuous visits by technical team from the aforementioned partners who have not been impressed with Ghana’s export data.
This will enable the state to index and measure the value of total goods that are imported and exported in order to have accurate data which reflects the performance of the economy with regards to international trade in real terms.
A chunk of Ghana’s export data declared by freight forwarders are classified as “others”, a practice which experts in the trade industry say has made it increasingly difficult to measure data because it does not give the precise output on particular items that have been declared.
Import-export indices measure the trade aspect of the performance of the economy by measuring the average changes in goods and services that are imported or exported to and from a particular country. They are essential for assessing the impact of international trade on the domestic economy.
Trade indices are also very useful to private enterprises engaging regularly in international trade directly for profit. The indices can reveal real (inflation adjusted) value trends that discount the effects of short – term currency exchange rate volatility.
This enables better strategic planning and decision making by enterprises engaged in international commerce and consequently, more efficient pricing and resource allocation by them.
It will be recalled that in March, 2001, the World Bank fined Ghana US$40 million as a penalty for failing to present accurate statistics of the country’s economy to it.
In an interaction with the Goldstreet Business, Head of Trade Statistics at the Ghana Statistical Service (GSS), Mr. Samuel Mortey said the project will employ items selected from both export and import data and indexes will run on them.
“The raw value does not really speak to the economy. When you index the value, it speaks to the economy which makes it possible to deflate the GDP with an index. You cannot use raw values to deflate GDP”, Mr. Mortey stressed.
In the U.S., import and export price indexes measure the average changes in prices of goods and services that are imported to or exported from the U.S. The indexes are produced monthly by the International Price Program (IPP) of the Bureau of Labor Statistics.
The Export and Import Act, 1995 (Act 503) defines Non-Traditional Exports (NTEs) to include all export products with the exception of Ghana’s customary goods such as cocoa beans, lumber and logs and unprocessed gold and other minerals.
Since the NTEs sector plays a critical role in Ghana’s economy, being one of the principal sources of foreign exchange generation, the implantation of the export-import indices is expected to enable trade performance to be tracked by having adequate data in order to know the performance of the economy.
By Dundas Whigham