Ghana in the US Export Strategy

M. Mbems, Johannesburg, South Africa
February 25, 2024

T he US National Export Strategy (NES) gives insights into the policies and strategies, conducted by a constellation of federal institutions to foster trade relations with other countries. Although this document primarly targets US companies, it is also useful for countries like Ghana. The document contains vital and useful information for Ghanaian companies that plan to import or export goods and services from and to the United States. It also highlights key priority sectors and industries and products. The NES explains how various US federal agencies involved in trade related matters, including US diplomatic missions in individual countries, work together, to maintain US lead in international trade.

US-Ghana trade

In West Africa, Ghana is a prominent buyer of US goods and services. During the US-Ghana Business Expo in August 2023, US Ambassador Virginia E. Palmer declared that bilateral trade between the two countries reached US $3.7 billion in 2022, spurred by crude oil and cocoa, the two major export items from Ghana. The United States exported motor vehicles and auto parts for a value of US$328 million. Ghana also imported machinery (US$108 million), meat and poultry (US$93 million), and plastics (US$85 million) in 2021.

According to Ambassador Palmer, 100 companies are doing business in Ghana¹. Comparatively, in Kenya, the country's American Chamber of Commerce (AMCHAM) alone has 198 US companies as members, while Nigeria's AMCHAM has over 1,500 members. Ghana can attract more US companies if it removes the most obstructing hurdles. In a 2018, during an official visit, US Secretary for Trade, Wilbur Ross identified the ‟underdeveloped capital markets, non-transparent and price-based procurement processes, and workforce development”² in Ghana as potential obstacles to trade expansion. Nevertheless, Ghana remains a strategic entry point in West Africa for US companies. The country has ratified the African Continental Free Trade Agreement (AfCFTA) and will widens trade opportunities for US firms as a member of this continental free trade agreement³.

NES and NEDS

Ghana also has a National Export Development Strategy (NEDS), whose primary goal is to transform the structure of the economy from a commodity exporting country to a manufacturing economy. The NEDS is a multimodal policy, capable of grabbing opportunities from the private and public sectors. Although the US designs trade instruments, institutions, and policies to help US exporting companies, there are however areas of synergies between the two policies. Potential areas of complementarity between NES and NEDS include digitalization, the green economy and women economic empowerment through entrepreneurship.

Although Ghana does not dedicate the same amount of resources and institutional deployment to its NEDS as the US to its NES, the US vision on trade relations with Ghana is not in dissonance with those of Ghanaian authorities. The US has two goals that align with those of Ghana. They are outlined in the US 2022 Integrated Country Strategy (ICS) document. The first goal ‟seeks to improve Ghana’s economic growth, trade, and investment in a sustainable way for the mutual benefit of the United States and Ghana”. Second, the US wants to expand ‟economic prosperity and opportunity grounded in equitable and inclusive growth, as well as investments to encourage innovation, strengthening national competitiveness, producing goodpaying jobs, rebuilding American supply chains for critical goods”⁴.

Ghana and the major US trade initiative for Africa

Ghana is a beneficiary of US trade initiatives and important node in US-Africa trade engagements. The country is also America's most powerful advocate because of the shared beliefs in market economy and desire to improve the living conditions of people through sustainable policies.

• The African Growth and Opportunity Act (AGOA)

1. The African Growth and Opportunity Act (AGOA) seeks to boost trade between the US and Sub-Saharan Africa. AGOA provides eligible African countries duty-free access to the U.S. market for over 6,800 of which 5,000 products are under a preferential trade program.

• Prosper Africa

1. Prosper Africa is a U.S. Government initiative that connects U.S. and African businesses. This program aims at boosting two-way trade and investment flows between Africa and the United States. Prosper Africa aggregates and brings together services from across the U.S. Government to help companies and investors do business in U.S. and African markets. The Prosper Africa Secretariat works with 17 U.S. Government partner agencies and the White House National Security Council to advance Prosper Africa’s goals.

• Power Africa

1. Power Africa, is a U.S. Government-led partnership. This policy brings together the resources of the private sector, international development organizations, and governments from around the world to increase energy access in Africa. The goal is to add at least 30,000 megawatts (MW) of electricity generation capacity and 60 million new home and business connections by 2030. Power Africa works through partners, including the U.S. International Development Finance Corporation (DFC), using tools such as credit guarantees and first-loss capital, to de-risk investments and projects so that public and private investors can fund energy ventures.

• The Partnership for Global Infrastructure and Investment

1. The Partnership for Global Infrastructure and Investment (PGII) is a collaborative program, spearheaded by the United States, but involving the Group of Seven industrialized nations (G7) to fund infrastructure projects in developing nations. The G7 governments and private business sector plan to invest $600 billion in infrastructure in developing countries over five years. The PGII aims to catch up and perhaps offer an alternative to China’s activities in developing countries. China has invested over US$1 trillion in infrastructure, especially in developing countries, over the past decade.

• The Digital Transformation with Africa (DTA).

1. The Digital Transformation with Africa (DTA) seeks to expand digital access and literacy across the continent. The US plans to invest over US$350 million and mobilize another US $450 million in financing commitments for Africa, in line with the African Union’s Digital Transformation Strategy. This program represents an opportunity for Ghana because it aligns with the Ghana Digital Acceleration Project, which seeks to exploit trade opportunities emerging from the digital technology.

• The Clean Energy Supply Chains Initiative

1. The Clean Energy Supply Chains initiative program aims to secure supplies of critical minerals and increase the domestic production of batteries and low emissions technology hardware. At the moment, the USA relies on imports from countries such as China for over ten of these minerals. This initiative seeks to reverse this dependence by sourcing these minerals from Africa. According to Carnegie Endowment for International Peace, designating Africa as a source broadens opportunities for the African continent⁵.

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