Required Report - public distribution

**Date:** 10/5/2007

**GAIN Report Number:** GH7005

GH7005

**Ghana**

**Exporter Guide**

**Exporter Guide Annual**

**2007**

**Approved by:**

![](media/image1.wmf)Ali Abdi, Agricultural Attaché

U.S. Consulate General, Lagos, Nigeria

**Prepared by:**

Levin Flake, Elmasoeur Ashitey

**Report Highlights:**

The Ghanaian market continues to offer many opportunities for U.S.
exporters of high-value food products (HVP) and is key access point for
entry into the larger West African region market. Demand for these
products is expanding rapidly in Ghana but the U.S. share is currently
low (five percent). This report presents background information and tips
for exporters interested in entering this market.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Lagos \[NI1\]

\[GH\]

Table of Contents

[SECTION I. Market Overview 3](#section-i.-market-overview)

[Section II. Exporter Business Tips
5](#section-ii.-exporter-business-tips)

[Section III. Market Sector Structure and trends
7](#section-iii.-market-sector-structure-and-trends)

[Section IV. Best High-Value Product Prospects
11](#section-iv.-best-high-value-product-prospects)

[Section V. Post Contact and Further Information
12](#section-v.-post-contact-and-further-information)

[Other Relevant Reports: 12](#other-relevant-reports)

[Table A. KEY TRADE AND DEMOGRAPHIC INFORMATION
13](#table-a.-key-trade-and-demographic-information)

# SECTION I. Market Overview

The Ghanaian market has strong potential for expanded sales of U.S.
high-value consumer-ready food products. Ghana has a population of 20
million, which is growing at approximately 3 percent per annum.
Additionally, the country is projected by the Government of Ghana (GOG)
to be a gateway to West Africa, and thus offers U.S. exporters an entry
point in order to access the huge West African market, which includes
about 250 million people.

Retail food sales in Ghana for CY 2006 were estimated at approximately
\$1.2 billion, with the breakout as follows:

+--------------------------------------------------------+----+-------+
| Type of Food product                                   | \% | **\   |
|                                                        |    | $Mill |
|                                                        |    | ion** |
+--------------------------------------------------------+----+-------+
| Imported high-value food products (HVP)                | 32 | 384   |
+--------------------------------------------------------+----+-------+
| Partly processed and packaged in Ghana                 | 8  | 96    |
+--------------------------------------------------------+----+-------+
| Totally processed in Ghana                             | 15 | 180   |
+--------------------------------------------------------+----+-------+
| Locally produced foodstuffs, including fresh fruits    | 45 | 540   |
| and vegetables,                                        |    |       |
|                                                        |    |       |
| meat and fish                                          |    |       |
+--------------------------------------------------------+----+-------+
| Total                                                  | 1  | 1200  |
|                                                        | 00 |       |
+--------------------------------------------------------+----+-------+

**Source**: Industry Sources (Importers), Ministry of Trade

-   Out of total food and agricultural imports into Ghana, 32 percent
    (\$384 million) were high-value food products (HVP), according to
    industry sources. This represents an increase of 20 percent from
    2005 to 2006, and even higher growth rates are projected for 2007
    and subsequent years. This strong growth is because of a number of
    factors including:

    1.  A growing population

    2.  Rising income levels due to an expanding private sector

    3.  A relatively large and growing expatriate community

    4.  An expanding middle class where both parents work outside the
        home

    5.  A trend towards more eating outside the home, especially during
        lunch hours and weekends

    6.  A rapidly growing tourism sector (including a greater number of
        hotels and fast food restaurants)

    7.  Increased rural to urban migration

    8.  Lower tariffs and more relaxed customs policies

-   Imports from the European Union, Asia, and South Africa currently
    dominate the HVP market in Ghana. Although the U.S. share of HVP
    market in Ghana is growing, it still remains small (5 percent).

-   As a gateway to West Africa, Ghana is an access point where imported
    HVP could be re-exported into other nearby markets.

-   U.S. food exporters interested in doing business in Ghana can
    contact FAS Accra for additional information.

Advantages and Challenges

  ----------------------------------- -----------------------------------
  Advantages                          Disadvantages

  Ghana's population of 20 million is The average per capita income in
  growing at an annual rate of 3      Ghana is low at an estimated \$300.
  percent per annum.                  

  Increasing rural to urban migration The monthly minimum wage in Ghana
  is raising demand for HVP.          is just \$ 30.

  Ghana has an active and             Some Ghanaian importers complain
  entrepreneurial middle class and a  that U.S. exporters are not as
  fast growing private sector.        responsive to importer requests
                                      regarding price quotations,
                                      packaging and documentation as
                                      their EU and Asian competitors.

  Ghanaian consumers perceive U.S.    Freight costs for products shipped
  HVP as being of high-quality        from the United States are higher
  standards.                          than those from the EU, Asia or
                                      South Africa.

  Ghanaian consumers readily accept   U.S. HVP are not readily available
  snacks and convenience-type foods   in Ghana, while HVP from EU, South
  from the United States and demand   Africa, and Asia are in greater
  for these products is growing.      supply.

  Ghanaian consumers are frequenting  Lack of direct U.S. to West Africa
  more supermarkets and convenience   shipping routes results in
  stores in order to save time and    transshipments through Europe,
  because of greater cleanliness and  which add costs, longer shipping
  orderliness.                        times and sometimes results in
                                      losses of some goods.

  The Government of Ghana (GOG), in   The tropical climate is not
  line with its WTO obligations, has  conducive to displaying many
  liberalized trade.                  imported food products in the
                                      traditional open markets which
                                      remain prevalent in Ghana.

  Increasing female workers and       Most retail food outlets in Ghana
  children attending schools is also  are family owned and lack the
  boosting demand. Also the size of   expertise and capital needed to
  the middle and high-income class is modernize and expand to meet the
  expanding.                          demands of the increasing retail
                                      market in Ghana.

  U.S. grocery items entering Ghana   Some U.S. firms view the Ghanaian
  can be re-exported to neighboring   market as too small a market to
  West African countries (a market of enter and few freight consolidators
  250 million).                       in the United States are willing to
                                      meet ordering and shipping
                                      requirements of Ghanaian importers.

  Ghana will continue to import HVP   The infrastructure for processing,
  items as most are not produced      storage and distribution of HVP and
  domestically. Ghana's domestic food other perishable products is
  processing capacity is still        limited in Ghana.
  under-developed and limited.        
  ----------------------------------- -----------------------------------

# Section II. Exporter Business Tips

-   Ghanaian importers prefer high-value consumer-ready products with
    the following characteristics:

1.  Relatively small-sized products prepared and packaged for one-time
    use.

2.  Bulk, intermediate products and ingredients that can easily be
    re-packaged in Ghana without additional production costs.

3.  Perishable food products processed and packaged for long shelf-life,
    and not requiring much refrigeration.

4.  Mixed containers of high-value products and brands.

-   All HVP must be registered with the Food and Drugs Board (FDB),
    Ghana, prior to being exported to Ghana. The FDB is the GOG
    regulatory body for food product manufacturing, importation,
    advertisement and distribution in Ghana. In order to register a
    product for export:

    1.  The manufacturer/exporter must apply for registration of the
        product.

    2.  Although not mandatory, a Ghanaian agent with a registered
        company or business with the capacity to affect a product recall
        if necessary may represent the exporter.

    3.  The FDB then regards the local agent/importer to be acting as a
        representative of the foreign manufacturer.

    4.  The local agent/representative coordinates all the registration
        processes for the imported food products with FDB

    5.  A FDB registration fee for vetting, processing and documenting
        imported food products must be paid. This fee for 2007 is 300
        New Ghana cedis (\$326), up from just 54 New Ghana Cedi (\$60)
        in 2004.

    6.  In addition to registering a product, the importer also must
        also be registered with the FDB for a fee of 100 New Ghana cedis
        (\$109), renewable on a yearly basis.

    7.  A product inspection fee for each import must be paid to ensure
        the products meets the necessary requirements. This fee is
        currently 50 New Ghana cedis (\$54).

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-   For more details please, see FAIRS Report No: GH7002 (Section VI
    Import regulations).

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-   The GOG agent for the collection of import duties is the Customs,
    Excise and Preventive Service (CEPS). The standard rate of duty for
    HVP food products is 20% of the C&F value. In addition:

    1.  All HVP imports are assessed at 12.5% Value Added Tax (VAT).

    2.  National Health Insurance Levy (NHIL) of 2.5% to be collected by
        the VAT Secretariat.

    3.  Export Development and Investment Fund Levy (EDIF) of 0.5%.

    4.  ECOWAS Levy of 0.5%.

    5.  Ghana Customs Network (GCNET) of 0.4%

    6.  A general exemption from payment on the import duty can be
        granted on items such as ingredients for the manufacture of
        poultry feeds, if certified as such by the Ministry of Food and
        Agriculture.

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-   Goods exported to Ghana are now subjected to **Destination
    Inspection** at the port of entry in Ghana, and as of April 2000,
    HVP exported to Ghana are no longer subjected to Pre-shipment
    inspection (PSI).

1.  The Gateway Services ltd (GSL), a joint venture between the Ghana
    Harbors Authority and CEPS, is responsible for inspecting goods
    arriving at the Ghana seaport.

2.  The Ghana Standards Board and Bureau Veritas of France (GSBV), are
    responsible for inspect goods arriving into Ghana by air.

3.  The importer pays an inspection fee of 1% of the C&F value to the
    inspection agency.

4.  For fast clearance of imported goods from the ports and other entry
    points, importers in Ghana are required to submit to the appropriate
    inspection agency (GSL or GSBV) Import Declaration Forms (IDF),
    Proforma Invoice and Supplementary Information Documents
    **twenty-two** days prior to the arrival of the goods.

5.  Importers are also to submit the Final Invoice, Bill of Lading and
    the Packing List **ten days** prior to the arrival of the goods. The
    early submission of these documents can help expedite the clearance
    of the imported goods.

6.  The Gateway Services ltd has installed a container Mobile X-Ray
    Scanning machine at the Tema port in order to facilitate trade and
    provide efficient verification of imports. This will reduce the
    dwell time of containers at the ports, thereby making the ports in
    Ghana less expensive.

-   The documentation procedures for all imports is as follows:

**Flow Chart: Import Documentation Procedures**

# 

# 

### 

1.  The Importer obtains Proforma Invoice (attested), completes the
    Import Declaration forms (IDF), obtains an Insurance Policy on the
    goods and contacts and applies for an irrevocable Letters of Credit
    (LC) with the local bank.

2.  The Exporter receives notification of the LC, ships the cargo and
    sends the Bill of Lading/Airway Bill to the Importer.

3.  The Importer arranges for Destination Inspection with the Gateway
    Services ldt (GSL) for goods by air or Ghana Standards Board and
    Bureau Veritas (GSBV) for goods by sea. The importer collects the
    approved Final Valuation Report (FCVR), completes clearing the
    Single Administrative Document (SAD) with Customs, Excise and
    Preventive Service (CEPS), and pays to CEPS the total duties and
    taxes on the CIF value of the goods. The importer ensures clearance
    by the Foods and Drugs Board (FDB), the Ghana Narcotic Board (NCD),
    Veterinary Services (VET), and other agencies stationed at the
    ports.

-   Opening of Letters of Credit (LC) in Ghana is often time consuming
    and expensive.

1.  Most Ghanaian importers utilize inter-bank wire transfers for
    payment of imported food items.

2.  The exporter ships the items to the importer upon receipt of his
    bank transfer payments.

3.  To issue an LC, the banks may ask for 100% collateral from the
    importer, thereby making the use of LCs very expensive.

-   Despite rules and regulations for importing HVP, and restrictions on
    certain products:

    1.  Some importers and distributors of HVP in Ghana often purchase
        products that have been smuggled into Ghana from neighboring
        countries. As a result some goods that are legally prohibited
        from entering Ghana are often seen on the Ghanaian market.

    2.  Some importers also manipulate documentation (under invoicing)
        to reduce or avoid the payment of duty to GOG.

# Section III. Market Sector Structure and trends

-   The retail food sector in Ghana consists of three main sub-sectors

> -Super Markets
>
> -Convenience stores and small groceries
>
> -Traditional open-air markets
>
> These account for approximately 5, 30 and 65 percent respectively, of
> the total retail food sector.

-   Industry estimates that retail sales of imported high-value food
    products follow a similar pattern and Super Markets account for 5
    percent, Convenience Stores/groceries, 30 percent, and Traditional
    Markets make up the largest section with 65 percent.

![](media/image2.wmf)

-   The major players in Ghana for merchandising imported HVP are:

> -Importers/Distributors
>
> -Agents/Sole Representatives
>
> -Wholesalers
>
> -Sub-Wholesalers/Supermarket Retailers
>
> -Retailers

-   The following illustrates the inter-relationship between these
    players in merchandising imported HVP in Ghana.

-   New hotels, restaurants, fast food joints and food catering services
    are springing up in Accra (Capital) and other regional urban centers
    (notably Kumasi, Takoradi, Tema). These represent small but growing
    outlets for consumption of imported HVP products and present more
    opportunity for sales of U.S. intermediate foods and ingredients.

-   Good market potential in the hotels and resorts, restaurants, and
    institutional contracts (HRI) sector exist due to:

    1.  Increased tourism from the United States and other countries.

    2.  The expanding Ghanaian middle class, senior executives and other
        professionals frequently meet their business partners and
        contacts in hotels and restaurants.

    3.  A growing number of restaurants in Ghana are offering food
        products and services tailored to the tastes and preferences of
        their patrons.

    4.  An increasing number of caterers are offering mobile food
        services in homes, offices, schools and social gatherings.

    5.  Many Ghanaians, returning home after spending extended amounts
        of time overseas have acquired tastes and preferences for HVP,
        and are thus demanding more of these products.

    6.  The most suitable cities in Ghana for focusing efforts to the
        HRI sector are Accra, Kumasi, Tema and Takoradi.

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-   Domestic food processing capacity is under-developed in Ghana.

1.  Capacity utilization within this sector averages not more than 15
    percent.

2.  Locally produced HVP are mostly lower quality items and do not meet
    the requirements of growing and more sophisticated Ghanaian
    consumers.

3.  Poor infrastructure has impeded the growth of the domestic food
    processing sector in Ghana.

-   The origin and supply of imported consumer-ready food products is as
    follows: United States 5 percent, Asia 40 percent, EU 45 percent,
    South Africa/Others 10 percent.

> ![](media/image3.wmf)

-   The low U.S. market share is attributed to the following reasons:

1.  Higher freight costs from the U.S. to Ghana make non-US food
    products more price competitive in Ghana

2.  Some U.S. exporters regard the Ghanaian market as too small or
    unattractive to warrant much spending on marketing or the time
    involved to introduce new products.

-   Importers (small scale) from Ghana are often secretive and
    protective of their activities and therefore reluctant to team with
    other small importers to purchase goods collectively. They thus
    incur higher operational costs, which often make imports from the
    United States unattractive to the Ghanaian small-scale operator.

-   Ghanaian importers:

    1.  Seek exclusive distribution agreements from exporters.

    2.  Prefer purchasing mixed containers of HVP.

    3.  Want to minimize shipping costs, and therefore seek the services
        of the freight consolidators in the United States to handle
        their ordering and shipment needs.

    4.  Anticipate that their foreign suppliers will meet their desire
        to under-invoice their imports in order to reduce import duty
        payments.

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-   New-to-market exporters from the United States should consider the
    following market entry strategies and tactics:

    1.  Contact the Agricultural Attaché/Agricultural Specialist, US
        Embassy, Accra, Ghana, for assistance in selecting a local
        agent/distributor.

    2.  Appoint a local agent/distributor in Ghana to register their
        products with the appropriate GOG regulatory bodies, to
        introduce their products to the market, and to develop consumer
        demand.

    3.  Identify and sell through consolidators based in the United
        States who are already serving the West African region.

    4.  Exhibit at trade shows in the United States, especially at the
        FMI Food/Supermarket Show in Chicago, Illinois, which is
        attended by Ghanaian importers. This will also make follow-up
        contacts easier.

    5.  Offer food product shipments in mixed lot containers.

    6.  Offer flexible shipping volumes.

    7.  Support activities for in-store, and point-of-sale promotions in
        numerous small-sized outlets.

    8.  Adopt a pricing strategy, which encourages importers to initiate
        buying activities with U.S. suppliers.

    9.  Send sample products and sales catalogs to prospective local
        buyers.

    10. Contact the Embassy of the United States of America, Accra,
        Ghana, to locate the services of an attorney to deal with any
        legal matter that may arise.

# Section IV. Best High-Value Product Prospects

-   The following are the HVP products with the best prospects and most
    sales potential in the Ghanaian market:

    1.  Frozen poultry and fish products

    2.  Fruit preparations and juices

    3.  Canned fruits and vegetables

    4.  Tomato puree/ketchup

    5.  Bottled vegetable cooking oil

    6.  Milk (liquid milk, skimmed and whole powdered milk)

    7.  Spices and sauces including soy sauce

    8.  Mixed seasoning

    9.  Condiments

    10. Breakfast cereals

    11. Margarine/butter

    12. Pasta products

    13. Snack foods (biscuits, cakes etc)

    14. Confectionery products (candies, gums etc)

    15. Ice cream and yoghurt concentrates

    16. Spirits, liqueurs

    17. Beers and Wines

    18. Non-alcoholic beverages (Tea, coffee, fruit drink)

    19. Bakery and other food ingredients (yeast & baking powder)

    20. Mayonnaise and salad dressing

    21. Baby foods

    22. Canned soups/powdered soups

    23. Health food products

# Section V. Post Contact and Further Information

Ali A. Abdi

Agricultural Attaché

Office of Agricultural Affairs

US Consulate General

2 Walter Carrington Crescent

Victoria Island, Lagos, Nigeria

Tel: (234) 1 261-3926, 775-0830

Fax: (234) 1 262-9835

Email: <aglagos@usda.gov>

Website: [www.fas.usda.gov](http://www.fas.usda.gov/)

Elmasoeur Zipporah Ashitey

Agricultural Specialist

Office of Agricultural Affairs

Embassy of the United States of America

NO 20, fourth Circular Rd, Cantonments,

P O Box GP194

Accra, Ghana

Telephone: 233-21-679267

Fax: 233-21-231218

Email : <Elmasoeur.Ashitey@usda.gov>

Email : <Agaccra@usda.gov>

Website: [www.fas.usda.gov](http://www.fas.usda.gov/)

# Other Relevant Reports: 

Report Number GH7001, Ghana Trade Policy Monitoring Annual 2007
<http://www.fas.usda.gov/gainfiles/200703/146280481.pdf>

Report Number GH6004, Ghana FAIRS Annual 2006

<http://www.fas.usda.gov/gainfiles/200608/146208769.pdf>

> **EXPORTER GUIDE**
>
> **APPENDIX I. STATISTICS**

# Table A. KEY TRADE AND DEMOGRAPHIC INFORMATION

+---------------------------------------------------------+------------+
| Agricultural Imports from All Countries                 | 1000/15    |
|                                                         |            |
| (\$Million)/US Market Share (%)\*1                      |            |
+---------------------------------------------------------+------------+
| Consumer Food Imports From All Countries                | 384/5      |
|                                                         |            |
| (\$Million)/US Market Share (%) \*1                     |            |
+---------------------------------------------------------+------------+
| Edible Fishery Imports From All Countries               | N/A        |
|                                                         |            |
| (\$Million)/US Market Share (%) \*1                     |            |
+---------------------------------------------------------+------------+
| Total Population (Million) /Annual Growth Rate (%)      | 20/3       |
+---------------------------------------------------------+------------+
| Urban Population (Mil)/ Annual growth Rate (%)          | 6.65/3.0   |
+---------------------------------------------------------+------------+
| Number of Major Metropolitan Areas \*2                  | 4          |
+---------------------------------------------------------+------------+
| Size of the Middle Class (Millions)/ Annual Growth Rate | 3.5/2      |
| (%) \*3                                                 |            |
+---------------------------------------------------------+------------+
| Per Capita Gross Domestic Product (US Dollars)          | 300        |
+---------------------------------------------------------+------------+
| Unemployment Rate (%)                                   | 20         |
+---------------------------------------------------------+------------+
| Per Capita Food Expenditure (US Dollars)                | 195        |
+---------------------------------------------------------+------------+
| Percent of Female Population Employed \*4               | 3.3        |
+---------------------------------------------------------+------------+
| Exchange Rate (US\$ 1=0.925 New Ghana cedis (local      | 0.925      |
| currency)                                               |            |
+---------------------------------------------------------+------------+

**Footnotes**

\*1/Ministry of Food and Agriculture/Ministry of Trade and Industry,
Ghana

\*2/Population in excess of 1,000,000

\*3/Middle Class is the proportion of the Population earning an average
annual income of \$600 to \$2000

\*4/Per cent against total number of women (15 years old or above)

\*5/Note, if necessary, any significant exchange rate movements since
the previous year.

**NOTE**: This report does not include tables B and C since the FAS
web-enabled UN TRADE Database does not contain statistics for Ghana.