Could you please give us a brief overview on your professional background?
I had my education in Ghana. I graduated from the University of Ghana in 1974 with a law degree, after which I passed my Bar Exams and was called to the Bar in 1976. I went to work for the Attorney General for two years and for the National Investment Bank as a lawyer for 10 years.From there I got a job with the Export Promotion Council as Director for Trade Information and Export Services, which I did until 1993 when I was appointed Chief Executive of this organization. This has been my position from 1993 till now.
Since its inception in 1969 the Ghana Export Promotion Council has been the institution in charge of the promotion of the Ghanaian non-traditional products, how have you seen the evolution of this institution throughout the years?
According to the statute of incorporation of the Ghana Export Promotion Council, it is mandated to promote all of Ghana's exports, not just non-traditional exports. This is our statutory obligation.When the organization was established in 1969 not much happened. In trying to understand why this was so, we found that one of the reasons was because the macro-economic situation was not conducive. However in the last 10-15 years, this organization has found a few new methods that came up from about 1983, when the government adopted the Economic Recovery Program.The Economic Recovery Program is the program that was supported by the World Bank and the International Monetary Fund when the Structural Adjustment Programs were put in place to try to resuscitate the economy, which had virtually collapsed by 1981. So, the strategy of the Economic Recovery Program was to use export as a basis for economic recovery, so what they did in the very early days was to try to reactivate what we now call traditional exports, like the cocoa bean exports, timber exports, mining sector exports. These were the targets of the Economic Recovery Program. By 1986 it was already clear that these sectors were going to come back straight, but it was also clear that no matter how fast these 3 sectors grew it was not going to be enough to sustain the level of growth that this economy was looking for. We therefore began to think about how to diversify and increase the export portfolio. This is where the export promotion council then began its new lease on life.For a start, one needs to understand that the cocoa industry had a Cocoa Board as the sole institution responsible for the cocoa industry, the timber industry had the Timber Export Development Board as an institution or board focusing on timber. The mining sector also had the Minerals Commission as an institution that had been established to focus on it. The Export Promotion Council then decided that there was no need for us to spend time, resources and energy in trying to promote exports for these sectors when they had institutions in place. For example, Cocoa Board budget is about seven hundred times that of the Export Promotion Council so there is no point in us trying to spend money and time to fix their problems.After all people worldwide know that Ghana produces cocoa of the finest quality. The real challenge for this country and our organization therefore was to look at new export initiatives. This is how the idea of traditional as opposed to non-traditional exports came about. Our mandate as an organization is not limited to non-traditional or traditional exports, but we made a strategic choice not to spend our time on traditional export activities but rather to spend it on discovering new lines of export that could be developed to support the existing export sector. The strategy that we have been following in the export Promotion Council is twofold:we are following both horizontal and vertical strategies. In terms of the horizontal strategy, we are looking at expanding the portfolio i.e. adding more products to the three traditional export products that Ghana has. In terms of the vertical strategy, we are looking at adding value to the products so that as the size of the portfolio increases we can also deepen it by adding value. So, that is our strategic objective. A lot of people think that the mandate of the Export Promotion Council is to promote non-traditional exports. No, that is not our aim.
From yesterday's newspapers we understand that the Minister of Trade and Industry will revise the Trade Liberalization Policy because it will strengthen the local industries. Could you elaborate on this issue?
What is called Trade Liberalization Program came about with the Economic Recovery and the Structural Adjustment Programs. Prior to this time the international trade of this country had been run on the basis of controls. There was an import control system in place so it wasn't easy for people to import whatever they wanted to import. For example if a company or individual wanted to import tape recorders, they had to apply to the Ministry of Trade to obtain an import license and then apply to the Central Bank for an allocation of foreign exchange before being able to import products for sale in our market. What that system did was to create artificial shortages thereby enabling those who were able to get these licenses and foreign exchange allocations to charge what the economists call rent. For this reason, a lot of people who were manufacturers for example in this country were not really manufacturers. In reality they were manufacturers because they were able to access this system. They brought goods in and packaged them and somehow this was what was available to the market.The liberalization process abolished the import licensing and the exchange control systems. It therefore meant that the doors were opened and anybody could import anything. What then happened was that both the poor quality and good quality goods, meant for both low prices and high prices crowded into the market and local producers who were not very efficient or competitive went underneath. This is why the local business communities are against this open door policy and this is what the Minister is responding to in his statement. I do not think that it is the policy nor its objective or the Minister trying to close the door on trade liberalization. I do not think what the Minister proposed to do is to reinstate the exchange control or import licensing methods. I think what the Minister was emphasizing was that some of the products that are being imported and sold in this country are of poor quality. Imported electrical gadgets such as electric irons for instance may blow off on initial installation. So, quality and safety standards rules, hitherto which had not been fully enforced perhaps now need to be enforced as a way of managing the imports to ensure that even though there is an open door for people to import and to trade as they choose. At least there is a minimum standard that people must maintain in doing their businesses that way.What is happening internally is that, domestic producers are also being held to a standards control system. It is therefore important that the goods and services that come from the outside also conform to the same standards and the same levels of taxation or tariffs that the local business community is having pay. It will be unfair on the domestic producers because products coming from outside which do not meet the required standards find their way into the domestic market to compete with people whose goods meet the required standards and who have paid their taxes and tariffs.Some members of the business community have argued that they suspect there is ‘dumping' occurring from overseas markets into our markets. Those who are familiar with the GART or World Trade Organisation rules will understand immediately that ‘dumping', is an extremely difficult claim to substantiate within the World Trade Organisation system. Therefore, since no official complaint has been lodged on ‘dumping', yet we cannot conclude, but I believe the Government is aware of the problem, hence the Minister's reference to in his report. So this policy review will be to re-examine and to do a thorough study of this phenomenon to the problem and to establish for a fact whether indeed dumping is occurring. If it is indeed occurring, to put in place the appropriate standards and tariff system to ensure that local producers are not being discriminated against as far as relationship between imported products and local products are concerned.
How exactly do you promote exports?
This office is an old-fashioned trade promotion agency, and we basically use normal trade promotion instruments i.e. we are into product development. Product development is a situation where products that have been identified as having a potential for export and can receive technical assistance or designed assistance to either reformulate or to prepare the product to meet the demands of the market.
Do you operate on research and development, or do you advise?
We mainly advise, even though the advice is based on research and development. Basically we do product development and market development. We provide assistance and advice to business people who are looking to enter the market. The market development program involves things like organizing attendance at trade fairs, doing contact promotion programs, locating potential buyers, passing on information to both buyers and sellers. These are the basic trade promotion activities but in addition to this, due to our unique position within the national framework we also do policy advisory work for our government and we do a lot of trade information work as well, which is natural to the Trade Promotion Program.It is important for me to specify that this office does not involve trade. Even the advice and technical assistance that we offer to our clients comes entirely without any charge. Our budget is taken care of entirely by the government. Our organization is a government agency that is set up to provide the services that I have mentioned. There have been a lot of discussions for some time now as to whether or not the services that we provide here should be commercialised. We haven't found an answer yet.
What have been your major achievements?
When we started the Economic Recovery Program was instituted since 1982; by 1986 it had become apparent that something different should be done. When we started our program for export promotion in this office in 1986, what we did was to try to establish a baseline data that we could use to measure our progress. We therefore went back to 1984 and took the statistics for non-traditional export because we had then decided to focus on non-traditional export. The statistics for 1984 show that the non-traditional exports that had gone out of this country that year from January to December was less than 2 million dollars. | When we took the statistics from January to December 1999, we recorded 404 million U.S. dollars from non-traditional exports, and for us that is a measure of the impact of our work over the decade or so that we had been doing this accelerated program. It looks definitely impressive but we are very careful not to become complacent about it because we still think that it is inadequate. The reason being that if you look at the trade balance in our national accounts, the balance is still in deficit and this we believe is the cause for all the instability that you find in this economy. It is the deficit in the trade balance, which works into the currency depreciation, which works backwards into the prices and inflation and which in turn works it back to the whole system etc.Our objective is to turn this trade balance into surplus and if we can achieve that then the economy will stabilise and it will become a better economy. In order to stabilise or to achieve the surplus that we are looking for, we reckon that non-traditional exports should grow exponentially. So that if we had the time frame of say year 2020, under the Ghana Vision 2020 program, our estimation is that if you put the whole economics together, what the 2020 document says is that by the year 2020 Ghana should be a middle income country. So we asked ourselves, what does a middle income country mean? Middle-income country means our per capita income should be around 1700 US dollars a month.We again ask ourselves how can an export level of 2 or 3 billion dollars a year, with a population of 18 million growing at a 3% rate sustain a middle-income economy? What that means is that this whole export and import particularly the export has to grow and become bigger to achieve this.Our estimates and calculations based on the 2020 vision, is that the total export of this country should have grown to about 16 billion U.S. dollars in order that it can sustain a middle-income economy. Now, out of that 16 billion dollars, about 4 billion dollars is going to have to come from the traditional export sector, i.e. gold, cocoa and timber can grow from where they are today only so much because they are finite products that is even a very positive outlook but so where is the growth going to come from? The growth will have to come from the non-traditional export and non-traditional export by this calculation should be delivering about 12 billion dollars of export by the year 2020. So, our challenge is how we are going to move from 400 million dollars in 1999 to 12 billion dollars?
When we interviewed Mr. Ollennu, he mentioned to us that the Ghana Export Promotion Council will be integrated in the Gateway Project. Could you elaborate on that issue?
The Gateway Project is a project that is designed to recreate the environment for doing business. So, the Gateway Project will not deliver exports. What the Gateway Project will do, is to create an environment to enable those who want to do business to do it better. When the Gateway Project was first launched, the 1st phase concentrated on the institutions which were providing facilities or physical support to the trading environment; so you find that in the 1st phase for example, the Ports and Harbors Authority are receiving assistance, the Ghana Free Zone because they have to develop the infrastructure, the Civil Aviation who are developing the airport etc. In the 2nd phase, the actual trading, i.e. trade promotion of Ghana to say Burkina Faso or Ghana to U.S. That task will now come into focus. This is where organizations such as the Export Promotion Council will have to become proactive in their capacity to go out there and do the actual facilitation for the actual business. For example at that second phase we have to select products or identify products that could have a potential for export. We have to find commercial operators who are willing or prepared to participate in this program.We have to do a lot of market analysis and surveys similar to the market development program, do awareness programs, contact promotion programs, and essentially look for markets for your products.
What markets are we looking at right now?
We are mainly looking at three markets. The 1st one is the European market. Naturally, this has been a long-standing trading partnership particularly the U.K., Germany and Holland. One could describe them as traditional trading partners.We have been at each other for a very long time. The systems are well established so we think that there is a lot of room there for growth. We are looking at North America, particularly the United States, which also comes in seriously. The sheer size of the market and the fact that there is a very significant proportion of the population in the U.S. who trace their roots back to Africa create a peculiar and interesting opportunity for us. A lot of new African immigrants are also in the USA, so it constitutes an area of great potential. Looking at some of the figures, e.g. if we look at the garment import into the U.S. for instance it is well over 250 billion dollars worth of import.If Ghana got even two percent of that market it would make a difference.
How are you going after that?
Well it is a very tall order. The programming for this has just started. The fact is that we don't have a garment industry to speak of, yet here is a market that could absorb so much. Meanwhile, we are the government and not the businesses.We are not the ones to put factories in place and employ people to do the trading, so how does a government agency such as Export Promotion Council who has seen this opportunity carry this message to business people and persuade investors to put their money in.This is the challenge.It is because of the West Africa sub-region that we instituted the Gateway Project. The idea is that Ghana should become the Gateway to West Africa. This is where the concept of the gateway comes from. The rationality is very simple. In terms of geography, it is very well located it has a good access to the ocean and two working ports. We have an airport with International Standards so we introduced the idea of free zone trade so that the ports and their free zone becomes one entity. Also we have a road network, which connects to our neighbours. We even have energy distribution network which feeds into other countries in West Africa.We could sell electricity from C"te d'Ivoire to Benin using Ghana's distribution network.We started off by building a dam at Akosombo and what we did was to bring electricity from Akosombo to Accra, because VALCO, which is one of the biggest American investments in Ghana.That investment made the electricity viable. Once we did that, we extended the power to Sekondi-Takoradi. We had the line then up north along the mining areas to Kumasi and back to Akosombo, we then extended the line from around Bogoso to Elubo in the Ivory Coast, and then all the way North to Paga. The grid also continues from Akosombo across the border to Togo.It is also at the doorstep of Nigeria.For a country to be successful in export, one must have products for export, and to have products for export, people have to invest in production. The Export Promotion Council has estimated that there is a great potential in processed tropical fruits e.g. pineapples. The international market for pineapples and pineapple juice over the years there has seen an upward surge. We have therefore stepped up pineapple production and export. Each year, we export about 30,000 tones of whole pineapple fruits from Ghana. We are encouraging people to invest in pineapple farming, processing and export due to the high demand. The advantage in this is that it is a foreign exchange earner.What measures have you taken to further attract foreign direct investment to the country?This will not be done directly by this organization because there is another government agency, which is responsible for investment promotion: the Ghana Investment Promotion Center.So what we do is to team up with them, and in teaming up with them, we try to define the sectors where we expect export production to occur, so they focus on promoting investment in those areas, e.g. in the Export Promotion Council we think that one has to have products to export to be successful in the export field.We have determined in the Export Promotion Council that there is great potential in processed tropical fruits for example. The international market for pineapple juice is growing. We export about 30,000 tones of whole pineapple fruits from this country, so we realized that this could be an opportunity for investment.
How successful have you been in selling the Ghanaian pineapple overseas?
When we started this whole venture the pineapple export from this country and the production were almost negligible. We had to put together a program, which provided the means for a selected group of ten producers to begin the process of producing pineapples in commercial quantities and to demonstrate that this is doable and this is how the pineapple industry has become established. If you look at the 20 most successful pineapple producers today, maybe six of them who are still producing today were in our program.So we need to put together in very innovative ways all kinds of programs to initiate interest in investment, because as I said earlier, in 1994 non-traditional exports were less than 200.000USD. Non-traditional exports did not exist before and so with everything that is happening in the non-traditional export sector? we had to literally engineer interests in production. For instance cashew nut was never exported from this country before 1994, currently, we are exporting about 3,500 tones a year. A lot of people are gradually investing in the planting cashew nuts all over the Savanna Zone, because we developed a program to create awareness and to encourage people to grow cashew.At the moment there are about three to four companies who do nothing but buy cashew nuts for export.
What would be your final message to our readers?
The Ghana Export Promotion Council encourages you all to come and do business in Ghana. Your business is guaranteed success because you can export from Ghana any product to any part of the world. Your earnings will be yours. This country will not control foreign exchange earnings by businessmen. Under our banking regulations, one can actually maintain a dollar or a sterling account whilst here in Ghana so that offshore sales could go into these foreign accounts. Traders and businessmen are entirely free to use or apply those funds as they choose without government interference. |
