Cedi’s stability good for export sector — CEO of GEPA
Contrary to perceptions that the depreciation of the cedi normally inures to the benefit of exporters, the Chief Executive Officer of the Ghana Export Promotion Authority (GEPA), Mr Gideon Quarcoo, has explained that exporters, just like any other businesses, required a stable currency to be able to operate.
As a result, he said the stabilisation of the cedi was crucial in the realisation of the country’s exports strategy, which involve increasing export earnings to US$5 billion in 2019.
“The kind of growth we are talking about, to double export revenue to US$5billion by 2019 is a dramatic growth and so a stable currency is our ally. The cedi’s depreciation hurts us and in fact there were exporters who were looking for adjustments in rate and moved from one financial house to the other,” he said in an interview at a press briefing in Accra to announce the performance of non-traditional exports (NTE) in 2014.
He said that exporters engaged in value addition had particularly complained about the reduction in the value of the cedis coupled with unreliable power supply and high cost of operations.
“Some export manufacturers where actually producing below capacity at 40 per cent so you have to take a number of factors together to see the true impact of our economic conditions on exports and you see that, yes, currency is a big deal,” he said.
On the aggregate, he said 2014 had been a tough year and that it was surprising NTEs recorded 3.20 per cent increase over the previous year.
“Ghana’s current rate of growth for NTEs needs to be aggressively and dramatically increased to help the nation realise the targets set. The GEPA is appealing to stakeholders in the export sector to pay particular attention to increased supply volumes, higher quality standards and willingness to take the required risks to embrace market expansion for their products,” he said.
NTE performance
Export earnings of Non-Traditional products for the year 2014 amounted to US$2.514 billion, representing an increment of 3.20 per cent in value over the 2013 earnings. Earnings from NTEs ended 2013 at US$2.436 billion.
There are about 500 different NTE products categorised into agricultural, processed / semi processed and handicrafts.
Earnings from the NTEs in 2014 are made up of earnings from the three main sub-sectors, namely, agriculture 13.55 per cent, processed and semi-processed 86.31 per cent and handicrafts 0.14 per cent.
2015 target
The NTE sector is expected to yield US$2.6 billion, about 3.4 per cent above earnings of 2014 (US$2.514 billion).
This year is also the take-off year of National Export Strategy (NES) launched in 2013 and aimed at raising the level of export proceeds from NTEs to US$5 billion by the year 2019.
Mr Quarcoo said although the sector continued to be driven by value-added products, the full potential of these value-added products have not been realised yet and efforts must be made to achieve higher levels of value-addition through enhanced investments in agro-processing and other productive sectors.
“There is no magic to growing export revenue. To do that you must have the volume and the requisite quality of products. There is a huge opportunity for those in the NTEs sector. It is up to them to see the opportunities and also to understand that if you run a business there are risks, so if we leave it all to government and expect it to fund everything including our entry to markets and our survival to markets then we will not do business,” he said.