Positioning Ghana to compete effectively in the ECOWAS market: A policy challenge
The member states recognize that their individual trade and industry policies, as well as regional investment promotion initiatives therefore, must take into account the need to accelerate trade transactions among themselves. It has been expected for decades that as the regional integration process evolves, member states would re-organize their strategy towards the West African market. However, not enough seems to have been achieved on this front.
Judging from the type of commodities being traded, Ghana for example, could target some of the products that are being imported by its neighboring countries from outside the region and produce them for those target markets. Current trade statistics show there are a lot of trade opportunities in the sub-region that Ghana could take advantage of, with the right preparation.
The major products that Ghana currently exports to her immediate neighbours, Côte d’Ivoire, Burkina Faso and Togo are frozen tuna, plywood, cotton seeds, mattresses, sacks and bags of polymer of ethylene, rubber and plastic products.
The major commodities imported by Ghana from her neighbours are fresh tomatoes, onions, millet, dried beans, cement clinker, petroleum and crude oil.
However, Ghana’s neighbours all import a large range of finished and semi-finished goods which Ghana could consciously strategize and plan to produce for the sub-region.
In order to take full advantage of the vast West African market of nearly 300 million people, Ghanaian entrepreneurs would do well to enter into joint ventures with their counterparts, within the Federation of the West African Chambers of Commerce and Industry (FEWACCI) to try to produce directly or in partnership with other investors from non-
ECOWAS countries, including European, Asian, Middle-eastern or American investors.
Partnering with European investors to produce for the ECOWAS market is one of the key objectives of the sometimes controversial Economic Partnership Agreement (EPA), when it finally gets signed by all ECOWAS member states.
For Ghana to prepare adequately, the country needs to understand the West African market from a number of strategic viewpoints. For example, it would be necessary for Ghanaian businessmen and women to understand the Francophone business system and business laws and practices. This is because the immediate markets on Ghana’s borders are all French speaking.
In this context, it is important to important to point out that the business laws of Burkina Faso, Côte d'Ivoire, Togo and Benin are governed by the Organisation for the Harmonisation of Business Law in Africa (OHADA), to which belong 17 mainly francophone countries in Africa.
(NB OHADA includes two lusophone countries and one Spanish-speaking.)
Furthermore, Ghana would need to make a conscious and strategic effort to align its domestic laws with the numerous Acts and decisions of the ECOWAS Commission. In particular, this magazine would like to invite the Ghana Investment Promotion Centre (GIPC) and the Ministry of Trade and Industry (MoTI) to examine the state of the ECOWAS Investment and Competition Acts with a view to aligning them to Ghana’s business and investment laws. It is instructive that the GIPC has been holding stakeholder forums to update Ghana’s investment laws, and it is expected that making Ghana the centre of production for the ECOWAS market will be at the heart of the review process.
If Ghana is to position herself strategically to compete on the ECOWAS market in the decades to come, the Ghana National Chamber of Commerce and Industry (GNCCI) and the Association of Ghana Industries (AGI) as well as the Federation of Associations of Ghanaian Exporters (FAGE) would need to form strategic alliances with the newly revived Federation of West African Chambers of Commerce and Industry in order to build the capacities of the Ghanaian entrepreneur in identified areas in order to take full advantage of the West African market.
Political leadership also has a role to play. There is the need for the leadership of ECOWAS to work in concert to initiate far-reaching reforms that can attract international capital funding for sub-regional projects. These reforms have to include the tax regime; legal and judicial reforms; institutional reforms; capital market development; credible privatization; upgraded and harmonized infrastructure planning; and investment promotion and facilitation in all member states.
This need for reforms has become even more imperative because the nature of current globalization trends and the flow of foreign direct investment (FDI) require such aggregation and integration of economies of proximity. Thus, ECOWAS, with a market size of close to 300 million people, cannot afford but foster closer collaboration and co-operation to make itself more attractive in comparison with other
investment destinations. At the moment, the region attracts less than 5% of global FDIs, and only a sense amongst foreign investors that a business established in the sub-region will benefit fully from the protocols of an integrated market, will lead to a significant increase in that percentage.
The need for the effective implementation of the ECOWAS Regional Investment Policy Framework therefore, cannot be overemphasized. One of the requirements of the framework is the establishment of a Regional Investment Promotion Agency (RIPA) which will function to increase international awareness of member state’s investment opportunities, incentives, legislation, practices, and major events affecting investments through the regular dissemination of information. The creation of RIPA is long overdue.
At present, almost all the member countries of ECOWAS have their own individual national policies and programmes which offer varied incentives to attract investment. Some offer tax rebates for foreign-owned companies that invest in specific sectors of the economy while some allow for foreign-ownership of private enterprises up to 100%. The difficulty, however, is that most of the countries are too small, on their own, to wield the necessary clout that can woo the attention of the movers and shakers of international private capital. However, the experience of the European Union is signal, where a number of quite small countries have nevertheless benefited from common economic, financial and trade policies, and now a common currency - the Euro. In the case of West Africa and the ECOWAS region, the much-discussed sub-regional currency, the Eco, is still on the drawing board after more than 15 years of meetings, conferences, workshops, proposals, resolutions and timelines. ECOWAS must wake up. But even as the spotlight is focused on FDIs, it is important to also highlight the fact that investment promotion in West Africa cannot be discussed on the blind side of intra-regional trade and investment.
In preparing herself to take advantage of all possible trade and investment opportunities in the West Africa sub-region, Ghana has to play up her competitive advantages. These include the fact that the country is a natural leader within the West African sub-region, being the first African country, south of the Saharan, to gain independence in 1957, and having successfully steered herself through varied types of political governance for more than half a century without any civil war. Its civil service, notwithstanding various difficulties, is still considered one of the best in Africa, its educational system still produces some of Africa’s best professionals, it has two major seaports and several airports, more reliable energy and other utilities compared to its English-speaking neighbours, and currently boast 18 continuous years of democratic rule without any military interference.
Over the years, Ghana has continued to play a leading role in the socioeconomic and political growth and development of West Africa. In an era in which many international analysts allude to the sub-region as a hotbed of instability, the country, in a very exemplary manner, has anchored its governance on a thriving democracy resplendent with a culture of political tolerance and peaceful co-existence. In the last five years, the discovery of significant quantities of oil not just in Ghana, but in Benin, Liberia, Sierra Leone, in addition to Cote d’Ivoire, when added to vast fossil fuel resources of Nigeria and Equitorial Guinea, has made the West African coastline a hot new attraction for global investors.
That notwithstanding, this magazine is of the view that Ghana needs to show some more seriousness about further enhancing her competitive advantage in the sub-region by first, developing her capacity in basic French communications skills and to train its businessmen on how to succeed in cross-border trading and investment. The French Embassy in Ghana, through the Alliance Francaise, has some facility in this direction but this needs to be expanded. We may wish to invite the Embassies of Francophone countries in Ghana and the Canadian High Commission in Ghana to join this French communication skills initiative. Ghanaian businessmen and women need to take active interest in becoming bilingual business executives if they are to compete effectively in the ECOWAS common market. Equally necessary is for the governments and business communities of ECOWAS states and the ECOWAS Commission to take speedier measures to implement the many accords that have been agreed to integrate the sub-region.