EPA likely to improve Access to EU Market
14 November 2008
The Economic Partnership Agreement (EPA) is not likely to improve access to the European Union (EU) market for Ghana’s exporters beyond what Ghana already enjoys says an annual economic review and outlook report of the Institute of Economic Affairs.

“If the EU liberalizes 100 per cent of its market, this would be worth less than 1 per cent of the value of Ghana’s current exports to the EU,” it said.

The annual report presents an overview of the performance of the economy of Ghana during last year and outlook for 2008 and beyond.

The report said “even these small gains may not be realized if the EU maintains its tariffs on certain “sensitive products”, as it has done in previous Free Trade Agreements with developing countries.”


Ghana and the European Union (EU) last year December signed an initial agreement as a stepping stone towards the much talked-about Economic Partnership Agreement (EPA).

Dubbed the “Stepping Stone Economic Partnership Agreement”, the arrangement is intended to give Ghana some time to allow for more discussions with the EU on concerns over the EPA.

The EPA will allow 80 per cent goods from the European Union to Ghana duty-free and quota-free over a 15-year period while Ghana will have 100 per cent free access to the European market.


Under the agreement, Ghana will be entitled to export goods such as banana and canned tuna on quota basis and duty-free while protecting all sensitive Ghanaian sectors and products.

Under the agreement the report said Ghana will have to reciprocate by liberalizing a substantial part of its trade by lowering and eliminating tariffs on 80 per cent of its imports from the EU over a period of 15 years.

While Ghana might benefit from access to cheaper imported goods, eliminating tariffs will expose domestic producers to direct competition with EU firms the report said many of Ghana’s producers will no longer remain profitable as their ability to compete with EU imports is highly limited by severe supply-side constraints.

“There are real possibilities of worsening unemployment. Ghanaian poultry farmers are more worried about EPA than of the bird flu scare because of the collapse of their businesses as a result of poultry import increasing astronomically,” the report said.

On the impact of the EPA on revenue the report said “it is estimated that the revenue impact loses of the EPA may reach an equivalent of 66 per cent of total import duties and 10 per cent of total government revenue and these are significant loses.”

“If the government is unable to offset these financial losses, this could lead to possible cuts in public expenditure in important areas such as health and education,” the report said.

The report said the EPA has the potential to enhance ECOWAS regional integration on condition that the current weaknesses stemming from conflicting and overlapping regional trade agendas were sufficiently addressed.

On the industry sector the report said the sector which was projected to grow by 7.4 per cent had a reduced rate of 6.6 per cent compared to the 2006 growth rate of 9.5 per cent.
This decline the report said could be attributed to the severe energy crisis that hit the country.

“The share of the manufacturing sub-sector as a proportion of Gross Domestic Product (GDP) fell to 7.9 per cent in 2007 from a level of 8.6 per cent in 2006. This share of the manufacturing sub-sector recorded in 2007 was the lowest for the country since 1984,” the report.

The construction sub-sector according to the report continue to be a major driver of economic growth recording a growth rate of 15.0 per cent in 2007, higher than the 8.2 per cent growth achieved in 2006.

“The mining and quarrying industry recorded a 20 per cent growth in 2007 compared to the 13 per cent growth in 2006. The high growth of the construction industry was due to expanded programmes of the government partly financed by grants and loans from development partners,” it said.

Source: Ghanaian Times