Required Report - public distribution

**Date:** 10/3/2006

**GAIN Report Number:** GH6006

GH6006

**Ghana**

**Exporter Guide**

**Exporter Guide Annual**

**2006**

**Approved by:**

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

U.S. CONSULATE

**Prepared by:**

Elmasoeur Z. Ashitey, Agricultural Specialist

**Report Highlights:**

The Ghanaian market continues to offer good opportunities for US
exporters of consumer-oriented food products, reflecting its role as key
trade hub for West Africa.

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)

[Advantages and Challenges 4](#advantages-and-challenges)

[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
10](#section-iv-best-high-value-product-prospects)

[Best HVP product prospects: 10](#best-hvp-product-prospects)

[Product types that offer the most sales potential in Ghana:
11](#product-types-that-offer-the-most-sales-potential-in-ghana)

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

[APPENDIX I. STATISTICS 12](#appendix-i.-statistics)

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

# Section I Market Overview

Ghana has a population of 20 million, which is growing at approximately
3% per annum. Ghana, projected as the gateway to West Africa by the
Government of Ghana (GOG), offers US exporters access to an overall
market of about 250 million people in West African region. Therefore,
there is an excellent potential for sale of US high-value consumer-ready
food products in Ghana.

Retail food sales in Ghana for CY 2005 was estimated at approximately \$
1 billion

as follows:

+--------------------------------------------------------+----+-------+
| Type of Food product form                              | \% | **\   |
|                                                        |    | $Mill |
|                                                        |    | ion** |
+--------------------------------------------------------+----+-------+
| Imported High-value Food Products (HVP)                | 32 | 320   |
+--------------------------------------------------------+----+-------+
| Partly processed and packaged in Ghana                 | 8  | 80    |
+--------------------------------------------------------+----+-------+
| Totally processed in Ghana                             | 15 | 150   |
+--------------------------------------------------------+----+-------+
| Locally produced foodstuffs, including fresh fruits    | 45 | 450   |
| and vegetables,                                        |    |       |
|                                                        |    |       |
| meat and fish                                          |    |       |
+--------------------------------------------------------+----+-------+
| Total                                                  | 1  | 1000  |
|                                                        | 00 |       |
+--------------------------------------------------------+----+-------+

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

-   Out of the total food and agricultural imports into Ghana 32 percent
    (\$ 320 million) were high-value food products (industry sources).
    This represents an increase to 10 percent in 2005 compared to 2004.
    Higher growth rates are projected for 2006 and subsequent years
    because of:

    1.  a growing population

    2.  improving income levels due to an expanding private sector

    3.  a relatively large and growing expatriate community

    4.  a growing middle class where both parents work outside the home

    5.  the trend towards eating outside the home during lunch hours and
        weekends

    6.  a rapidly growing tourism sector (more hotels, more fast food
        joints)

    7.  the trend towards lower tariffs and relaxed customs policies

-   High-value consumer-ready products from the EU, Asia and South
    Africa dominate the market in Ghana. Although the US share of HVP
    market in Ghana is growing, it remains small.

-   Since the government is projecting Ghana as the gateway to the West
    African sub-region, opportunities exist for increased sales of US
    food products in Ghana. The imported HVP could be re-exported from
    Ghana into the West African sub-region.

-   US 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  | The average per capita income in  |
| is growing at an annual rate of   | Ghana is estimated at \$300.      |
| 2.7 percent per annum             |                                   |
+-----------------------------------+-----------------------------------+
| There is a continued high growth  | The monthly minimum wage in Ghana |
| in rural-urban migration          | is approximately \$ 30.           |
| increasing demand for HVP         |                                   |
+-----------------------------------+-----------------------------------+
| Ghana has a very active and a     | Ghanaian importers complain that  |
| very entrepreneurial middle class | US exporters are not responsive   |
| with a fast growing private       | to importer requests regarding    |
| sector.                           | price quotations, packaging and   |
|                                   | documentation as their EU and     |
|                                   | Asian competitors                 |
+-----------------------------------+-----------------------------------+
| The Ghanaian consumer perceives   | The freight costs for products    |
| US HVP as being of high quality   | shipped from the US are higher    |
| standards, thus accepts US food   | than those from the EU, Asia or   |
| products.                         | South Africa                      |
+-----------------------------------+-----------------------------------+
| Ghanaian consumers readily accept | US HVP are not readily available  |
| snacks and convenience-type foods | in Ghana; HVP from EU, South      |
| from the US and readily acquire   | Africa and Asia are more          |
| taste for these products.         | available                         |
+-----------------------------------+-----------------------------------+
| Ghanaian consumers patronize      | Lack of direct US to West Africa  |
| supermarkets and convenience      | shipping routes, transshipments   |
| stores due to cleanliness,        | through Europe, resulting in      |
| orderliness and time saving,      | added costs, longer shipping      |
| making shopping enjoyable.        | periods and pilfering of goods.   |
+-----------------------------------+-----------------------------------+
| The GOG in line with its WTO      | The tropical climate in Ghana is  |
| obligations has liberalized trade | not ideal                         |
| in Ghana                          |                                   |
|                                   | for displaying imported food      |
|                                   | products in traditional open      |
|                                   | markets (prevalent in Ghana).     |
+-----------------------------------+-----------------------------------+
| Increase in female workers and    | Most retail food outlets in Ghana |
| children attending schools. The   | are family owned. They lack the   |
| middle and high-income groups are | expertise and the capital needs   |
| growing in size.                  | for expansion and the training to |
|                                   | meet the demands of the expanding |
|                                   | retail market in Ghana.           |
+-----------------------------------+-----------------------------------+
| US grocery items entering Ghana   | US firms view the Ghanaian market |
| enjoy a bonus market of about 250 | as a small market. There are a    |
| million from other neighboring    | few freight consolidators in the  |
| West African countries.           | US who are willing to meet        |
|                                   | ordering and shipping             |
|                                   | requirements of Ghanaian          |
|                                   | importers.                        |
+-----------------------------------+-----------------------------------+
| Ghanaians will continue to import | The infrastructure for            |
| HVP items since most are not      | processing, storage and           |
| produced domestically in Ghana.   | distribution of HVP and other     |
| Ghana's domestic food processing  | perishable products are limited   |
| capacity is under developed       | in Ghana.                         |
+-----------------------------------+-----------------------------------+

# Section II Exporter Business Tips

-   The Ghanaian market prefers 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,
    without much refrigeration.

4.  Mixed containers of high-value products and brands

-   Imported 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.

    1.  The manufacturer must apply for the registration of the
        regulated product.

    2.  A Ghanaian agent (though not required) with a registered company
        or business with the capacity to affect a product recall if
        necessary may represent exporters.

    3.  The FDB 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.  FDB increased the registration fees on imported HVP from
        approximately \$10 in 2002 to \$60 in 2004 per product item.

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-   Please, see FAIRS Report No: 5001 (Section VI Import regulations)
    for details

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-   Customs, Excise and Preventive Service (CEPS), is Government of
    Ghana (GOG) agent for the collection of import duty.

> The standard rate of duty for HVP food products is 20% of the C&F
> value

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) is 0.5%

4.  ECOWAS Levy 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.

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

1.  The Gateway Services ltd (GSL), a joint venture between the Ghana
    harbors Authority and CEPS inspects goods arriving at the Ghana
    seaport.

2.  The Ghana Standards Board and Bureau Veritas of France (GSBV)
    inspect goods arriving in 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 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 the correct and genuine documents leads to the
    fast clearance of the imported goods.

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

-   Legal barriers do not fully affect the availability of food products
    on the Ghanaian market.

    1.  Importers and distributors of HVP in Ghana often purchase some
        HVP that have been smuggled into Ghana from neighboring
        countries.

    2.  A large proportion of HVP exported to Ghana are re-exported to
        other neighboring countries. Ghana only acts as a transit point
        for the HVP destined for the other countries.

    3.  Importers also manipulate documentation (under invoicing) to
        reduce or avoid the payment of duty to GOG.

    4.  Goods that are legally prohibited from entering Ghana are often
        seen on the Ghanaian market. They are smuggled into Ghana from
        the neighboring countries.

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-   Following are documentation procedures for all imports:

**Flow Chart: Import Documentation Procedures**

# 

# 

### 

### 

1.  The Importer obtains proformer invoice (attested), completes Import
    Declaration forms (IDF), obtains insurance policy on goods and
    contacts and applies for an irrevocable Letters of credit (LC) with
    the local bank. (Two weeks).

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 (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 of 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 transfer for the
    payment of their imported food items.

2.  The importer simply 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 making LC very expensive in Ghana.

# 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 1, 30 and 69 percent respectively, of
> total retail food sub-sector.

![](media/image2.wmf)

A.  Industry estimates that retail sales of imported High-value food
    products handled by the Super Markets, Convenience Stores/Groceries
    and Traditional markets is about 5, 30 and 65%.

![](media/image3.wmf)

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

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

-   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 imported HVP consumption and offer sales opportunity for
    US intermediate foods and ingredients.

-   Good market potential in HRI sector exist due to:

    1.  Increase in tourism, large numbers of tourists arrive in Ghana
        frequently from the US and other countries and they regularly
        patronize these places for their meals.

    2.  An increasing number of 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 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 their long sojourn abroad,
        have acquired the taste and preferences for HVP, and are
        demanding these

> products.

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

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

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

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

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

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

> ![](media/image4.wmf)

-   The low US market share is attributed to the following reasons:

1.  Higher freight costs from the US to Ghana making non-US food
    products less price competitive in Ghana

2.  US exporters regard the Ghanaian market as a small and unattractive
    market not worth the marketing costs and time.

-   Importers (small scale) from Ghana are secretive and protective of
    their activities and reluctant in teaming up with other small
    importers to purchase goods collectively. They thus incur higher
    operational costs, that adds up to make imports from the US
    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 US 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 US should consider the following
    market entry strategies and tactics:

    1.  Contact the Agricultural Attache/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, and to develop consumer demand

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

    4.  Exhibit at trade shows in the US, especially at the FMI
        Food/Supermarket Show in Chicago, Illinois, which is attended by
        Ghanaian importers, to 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 activity with US 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 engage the services of an attorney to deal with any
        legal matter that may arise.

# Section IV Best High-Value Product Prospects

## Best HVP product prospects:

1.  Canned fruits and vegetables

2.  Tomato puree/ketch-up

3.  Bottled vegetable Cooking oil

4.  Frozen Poultry and Fish products

5.  Fruit preparations and juices

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

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

## Product types that offer the most sales potential in Ghana:

1.  Frozen poultry and seafood

2.  Bakery, confectionery and food ingredients

3.  Fast food and HRI ingredients including, non-alcoholic beverages
    (Tea, Coffee), ice cream and yoghurt concentrates

4.  Tomato puree.

5.  Industrial processed foods and Beverages especially fruit juice
    Concentrates for local reprocessing and packaging

6.  Specialized food ingredients such as additives, preservatives and
    flavorings

# Section V. Post Contact and Further Information

Ali A. Abdi

Agricultural Attache

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

Ridge Roundabout (African Liberation Circle)

P O Box 2288, Accra, Ghana

Telephone: 233-21-679267

Fax: 233-21-231218

Email: <AshiteyEZ@state.gov>

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

## APPENDIX I. STATISTICS

### Table A. KEY TRADE AND DEMOGRAPHIC INFORMATION

+---------------------------------------------------------+------------+
| Agricultural Imports from All Countries                 | 900/15     |
|                                                         |            |
| (\$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 (%)      | 20/2.7     |
+---------------------------------------------------------+------------+
| 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=9,040 local currency (cedis)      | 9,040      |
+---------------------------------------------------------+------------+

**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.