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Tuesday, 06 May 2014

Ghana's Export Promotion Authority defends government on EPA

Ghana’s goal to boosting the value of non-traditional exports to $5 billion by 2017  will be endangered if government fails to sign the Economic Partnership Agreement (EPA) with the European Union, according to the country’s lead body for export promotion.
Failure to stem the steep depreciation of the cedi will also produce dire consequences for the target, as the weak currency pushes up the cost of imported inputs for exporters, said Gideon Kwame Boye Quarcoo, acting CEO of the Ghana Export Promotion Authority (GEPA).
Mr Quarcoo told the B&FT exporters are worried about the exchange rate and ongoing developments with the EPA. “If these challenges impact on exports in a significant way, and if they end up reducing the quantum that is generated, then this will threaten realisation of the target,” he told the B&FT.
The cedi’s dismal depreciation, if it goes unchecked, will hurt exporters importing raw materials with destabilising effects on the country’s economy, he warned.
Tagged as Africa’s worst performing currency in 2014, the cedi’s more-than-20-percent decline against the dollar in less than five months is the worst since 2000, when the currency lost almost 50 percent to the greenback. At its current rate of depreciation — 0.3 percent every day on average — the cedi could hit a trough of 3 cedis to the dollar by the end of May.
Not signing the controversial EPAs would also mean the country will have limited access to the EU market, which is currently Ghana’s top non-traditional exports destination — accounting for more than 34 percent of earnings in 2012, Mr. Quarcoo said.
Non-traditional exports (NTEs) refer to exports apart from cocoa, gold, oil and timber — the so-called traditional exports which, excluding oil, have underpinned Ghana’s economy for centuries.
Increasing the value of NTEs, which rose at a steady rate of 16 percent from 2001 to 2008, is one of government’s strategies to diversify the economy and limit reliance on volatile commodity exports.