Ghana’s overall market share remains small, at 0.02 percent globally.
Having a robust financial market infrastructure is vital to attracting foreign investors which allows greater export competitiveness on the financial market, the Barclays Africa Group has said.
According to a 2017 Financial Markets Index report by the group, Ghana requires a strong regulatory and operational market environment, high quality reporting, accounting standards and the availability of relevant and extensive financial information to be published regularly.
Such a framework is essentially important in the early stages of market development, the report noted.
‘’The export competitiveness of the Ghana’s market development will provide an important indicator of future growth prospects.’’
With an operational regulatory framework set in place, there will be an extensive opportunity to expand production for export, increase employment, boost revenue incomes and reduce unit costs.
The report said Ghana must exploit its comparative advantage to generate higher incomes, which can pay for the investments in skills, capital, and technology to enhance its competitiveness over time.
With the knowledge gained from exposure to export competition, will help in raising productivity and innovation with new products.
Strong export figures however can reflect both on sound domestic economic policies and diverse export partners, which can be useful in minimising negative demand shocks.
The report noted Ghana has increased its export market share by over 166 percent in the past five years, indicating significant improvements in competitiveness, although its overall market share remains small, at 0.02 percent globally.
‘’Ghana will need to create a favorable business environment to attract foreign investment, and raise competitiveness of production and exporting companies’’ it added.
Some constraints identified by many exporters however are industry specific, while, main cross-cutting issues, relate to the trade regime, and the provision and availability of infrastructure.
It suggested that an export strategy for the country’s growth, should be based on two basic principles which include maximizing the returns to current comparative advantage; and, over time, “catalyzing” export diversification towards more sophisticated sources of advantage.
The average for countries in the Index is 0.11 percent. Nigeria’s market share has fallen by 40 percent, but remains large in absolute terms.
South Africa has both the largest export market share as well as the largest decline in export share growth over the past five years, indicating falling competitiveness and lower demand for its exports in an arduous external environment.
By Mawuli Yao Ahorlumegah