Business opportunities for Ghana and the EU
3 July 2024 - 4 July 2024|
Accra, Ghana
Airport road,
Marriott hotel
BACKGROUND AND CONTEXT
Cooperation between the European Union and Ghana started with the first Lomé Convention in 1975. The two parties have since developed fruitful social, political and economic cooperation and this has strengthened over the years with successive agreements, the latest being the Economic Partnership Agreement (EPA) signed in 2016. The EU is one of the largest investors and trade partners for Ghana.
Specifically with regard to the business environment and investment climate, the country possesses political, demographic and geographical advantages advocating for it to be a primary investment destination in West Africa, where EU operators are facing an increasingly challenging environment. Although the country is trying to leverage on Africa’s economic integration by hosting the AfCFTA Secretariat and promoting itself as the commercial and trade hub of Africa, the reality of doing business in Ghana is complex.
Indeed, the deterioration of the business environment has led to an increasing number of companies to question the real attractiveness of Ghana not only for fresh capital but also for their current investments. Statistics show that despite the overall rebound of FDI to Africa, Ghana’s performance in 2021 was below the continent’s average.
EU is Ghana’s number one supplier
On the positive side, with the entry into force in 2016 of the landmark Economic Partnership Agreement (EPA), duty-free and quota-free access for Ghana’s products to EU markets was legally cemented. The Agreement ensures stability, predictability and legal certainty for economic operators trading between the EU and Ghana. The EPA also places Ghana in an ideal situation to take advantage of the market opportunities on the African continent. Since the EPA entered into force in 2016, Ghana’s total export volume almost doubled, from €9.5 billion to €17.6 billion in 2022. In other words, the Agreement works and creates an enabling base for more sustainable and efficient supply chains in Ghana.
The EU is Ghana’s number one supplier (€3.3 billion in 2023) while, at the same time, Ghana exported €2.6 billion worth of products to the EU. This makes the EU Ghana’s second most important merchandise trade partner, with a total trade value of around €6 billion in 2023. EU companies also invested around 1 billion euros in the country.
The EPA agreement notably also lowers the cost of importing machinery, technological advanced inputs and production knowhow. It enables Ghanaian businesses to import necessary machinery at a cheaper price from Europe to process Made in Ghana products destined for the African and exports markets. The EPA can therefore be instrumental in furthering Ghana’s ambition to become a regional and continental trade hub. Moreover, the attractiveness of the country for European investments could be enhanced through a Sustainable Investment Facilitation Agreement (SIFA), which aims to foster a more transparent, efficient and predictable business climate by focusing on practical measures to improve the attraction, expansion and retention of foreign direct investments.
Keys findings
Many EU companies are present in Ghana. In a recent survey carried out by the European Commission’s Directorate-General for International Partnerships (DG INTPA) and the EU Delegation to Ghana, 60 European companies currently active in Ghana responded and the key findings include:
-
EU companies are contributing (directly and indirectly) to almost 57 000 jobs in Ghana
-
In the past 5 years EU Foreign Direct Investments amounted to over €18bn
Further information can be found here.