But Mr. Mahama will face stiff headwinds almost immediately. The country is engaging with the International Monetary Fund - the IMF - to stabilize its finances, manage rising debt, and boost economic growth. The country still grapples with youth unemployment, economic inequality, and food insecurity.
The incoming Mahama administration will have a unique tool. The Ghana Trade and Investment (GTI) program is providing technical assistance and more to address these major concerns and get Ghana back on the right track. GTI integrates its interventions with Ghana’s Ministry of Food and Agriculture and receives financial backing from the U.S. government’s Feed the Future Initiative and the U.S. Agency for International Development.
Key to success will be expanding export-oriented trade, which the program does. It also helps Ghana to establish product standards. It works with the private sector to improve the potential of high-value commercial crops. And in this way, it promotes job creation. This is true, especially for women and youth. At the same time, GTI is diversifying risk through alternative crops. This is now having the effect of increasing foreign exchange revenue - exactly what Ghana’s Central Bank now needs to meet the demands of its creditors, both international and domestic. By expanding private sector investment, GRI is already spurring innovation and generating new capacity across Ghana.
So, how is this working specifically?
Improving and Enforcing Quality Standards in Value Chains
If the new Mahama Administration wants to expand Ghana’s global market presence and generate more export revenue, it needs to improve food safety and quality in its exports. GTI is specifically targeting small and medium-sized enterprises - those hiring historically marginalized and poor populations like youth, women, and individuals with disabilities. Through GTI, these groups can now work with other private sector organizations, government, and educational partners to enhance food safety. This is already improving export opportunities. GTI value chain commodities already include cashew, mango, maize, pineapple, cowpeas, soybean, groundnut, shea, yam, and other vegetables.
Cutting Costs
Increasing incomes, expanding exports, and satisfying customers means delivering a quality product at a reasonable price. GTI is working hand-in-glove with partners at the Ministry of Trade and Industry, the Ghana Revenue Authority, and Ghana’s Food and Drugs Authority to cut red tape. Together, they have worked with private industry and streamlined the process of cross-border trade. Key to this success has been implementation of the recommendations from a “Time Release Study” by GTI along with its government partners and Ghana’s National Chamber of Commerce and Industry.
Helping Small Business to Expand Investment and Sales
GTI is focused on increasing profits for small businesses which translates into jobs, especially for youth and women. That requires improving those firms’ international competitiveness. To do that, GTI is connecting these small businesses to service providers and associations. With now expanded access to credit markets, these small businesses are making new connections, increasing sales, and generating exports.
The program also provides grant assistance for training, trade shows, getting certifications, and implementing traceability systems. These targeted and focused grants have improved efficiency, increased sales, and expanded investments. While the majority of grants have gone directly to small businesses (over 30), some additional grants have helped Ghana’s government directly. The Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL), Green Label, the Ghana Export Promotion Authority, and the Plant Protection and Regulatory Services Directorate (PPRSD) of the Ministry of Food and Agriculture are examples of such beneficiaries, in turn helping small businesses.
The program has found that warehousing is an essential component for these small businesses. The Ghana Commodity Exchange (GCX) is a private company that issues warehouse receipts for commodities like minerals, petroleum, and agricultural products. The GCX Warehouse Receipt System (WRS) uses licensed warehouses to store commodities and issue receipts as collateral for loans. The GCX WRS uses a legal and regulatory framework to ensure that commodities are stored securely and that banks are willing to partner. The GCX was established in 2018 as a Public Private Partnership, with the government of Ghana as the sole shareholder. Integrating this system to work with the small businesses has been a creative new focus for the program.
The GTI program did not forget about the importance of customs for exporters. GTI trained a hundred customs officials from around the country on the classification, valuation, and origin determination for goods. This in turn has helped the Ghana Revenue Authority to more quickly process exports, further cutting costs for everyone.
GTI has also integrated AEO Ghana into its operations to help small businesses. AEO Ghana is a program that certifies companies in Ghana that are compliant with customs and supply chain security standards. The program is part of the World Customs Organization's (WCO) SAFE Framework of Standards. An AEO (Authorized Economic Operator) is an enterprise involved in international trade that complies with the standards set by the local General Administration of Customs. The AEO system, advocated by the WCO, is a key component of the WCO's "Framework of Standards to Secure and Facilitate Global Trade." It aims to certify companies with high levels of legal compliance, creditworthiness, and security through cooperation between customs, the business community, and other government departments. This initiative aims to minimize the risks associated with customs supervision, enhance global supply chain security, and facilitate trade, ultimately achieving mutual benefits and smoother trade flows for the participating enterprises.
AEO certification allows the company to leverage enhanced trade convenience and preferential treatment. With AEO certification, the company can enjoy priority in processing and customs assessments, expedited declaration procedures, reduced inspection and verification frequencies, and lower logistics time and costs.
Moreover, AEO certification facilitates customs clearance benefits for international trade partners in countries or regions with mutual recognition agreements with GRA-Customs. This strengthens collaboration and fosters closer relationships with global trade partners.
Via this intervention with AEO Ghana, the partnership with GTI allows for:
- Faster customs clearance: AEO-certified companies can clear goods faster and with fewer inspections;
- Reduced costs: AEO-certified companies can save time and money on logistics;
- Improved reputation: AEO-certified companies are considered lower risk and are less likely to be targeted for inspections; and
- Access to trade agreements: AEO-certified companies can access the AEO Mutual Recognition Arrangements (MRA) and other trade facilitation agreements.
The AEO certification process provides additional backing for exporters. It ensures a secure and safe transport of goods. It prevents unauthorized access to and tampering with the means of transport and the goods being transported. It provides the necessary transport documentation. And it allows for the necessary legal formalities in accordance with customs law.
Tangible Success by the Numbers
The program is off to a fast start. It is racking up impressive numbers:
- It has reached about 25,000 Ghanaians, about two-thirds of them women.
- Expanded sales of $594 million by small businesses and individuals. Of this, $48 million were exports and $546 million were domestic sales. $3.3 million of the exports went directly to women-owned businesses.
- $9 million in new lending for GTI-associated entities, with 60 additional firms now credit ready (after GTI-led business improvements) awaiting $149 million in the financing pipeline.
- Over 9,000 new jobs in firms helped by GTI.
- About 21,000 individuals have received agriculture-related services and another 3,500 that got help with trade activities. That has covered 298 different companies that received help with business development.
- 36 enterprises have received grant funding totaling $1.9 million.
- 50 firms now have new international certifications, and eight GCX warehouse licenses.
- 30 new traceability systems - all in the private sector - now drive 30 firms. An additional 15 exporters have upgraded national traceability systems (GHTrace).
- New digitized certificate of origin, import licenses and export permits via onboarding five new exporters to the AEO program, paving the way for new entities to join.
The Take-Away
Ghana has come through a financial storm in recent years. The GTI will be one of the critical tools the new Administration uses to chart the course toward a brighter future, especially for women, youth, and persons with disabilities leading small and medium-sized businesses. It also reflects a success for the U.S. Feed the Future program both in terms of concrete, tangible results and playing a positive role in helping Ghana to right its finances. In this way, the U.S. government is working in concert with the International Monetary Fund, the World Bank, and the African Development Bank to set Ghana up for success.
