Required Report - public distribution

**Date:** 5/3/2006

**GAIN Report Number:** GH6001

GH6001

**Ghana**

**Trade Policy Monitoring**

**Annual**

**2006**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Elmasoeur Z. Ashitey, Agricultural Specialist

**Report Highlights:**

Ghana operates a relatively free trade market economy. Tariff remains
Ghana\'s main trade policy instrument. Import tariff exemption is
applied on some agricultural items such as raw materials and ingredients
for animal feed and veterinary drugs. Ghana continues to maintain strict
product standards, such as shelf life and labeling requirements.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Lagos \[NI1\]

\[GH\]

Table of Contents

[SECTION I: Executive Summary 3](#section-i-executive-summary)

[SECTION 11: AGREEMENT COMPLIANCE 3](#section-11-agreement-compliance)

[A. World Trade Organization 3](#a.-world-trade-organization)

[Market Access 3](#market-access)

[Trade 3](#trade)

[Tariff Barriers 3](#tariff-barriers)

[Non-Tariff Barriers 4](#non-tariff-barriers)

[Sanitary and Phytosanitary Measures
4](#sanitary-and-phytosanitary-measures)

[Product Specification 5](#product-specification)

[Labeling Requirements 5](#labeling-requirements)

[Shelf Life 5](#shelf-life)

[Product Standards 5](#product-standards)

[Certification 6](#certification)

[OTHER TRADE AGREEMENTS 6](#other-trade-agreements)

[1. Trade Agreements with the United States
6](#trade-agreements-with-the-united-states)

[Free Trade Agreements 6](#free-trade-agreements)

[Trade and Investment Framework Agreement (TIFA)
6](#trade-and-investment-framework-agreement-tifa)

[2. Trade Agreements with ECOWAS countries
6](#trade-agreements-with-ecowas-countries)

[3. Ghana-European Partnership Agreement
7](#ghana-european-partnership-agreement)

[4. Ghana Bilateral Trade arrangements
7](#ghana-bilateral-trade-arrangements)

[Section III. Trade Barrier Catalog
7](#section-iii.-trade-barrier-catalog)

[Section IV. Reference Material 7](#section-iv.-reference-material)

[Import Tariff Rates (Table A) 7](#import-tariff-rates-table-a)

[SECTION IV: REFERENCE MATERIAL 8](#section-iv-reference-material)

# SECTION I: Executive Summary

Ghana operates in a relatively free market environment. Trade and
investment liberalization has been integral to Ghana's economic freeform
program. These trade policies of the Government of Ghana (GOG) are
focused on making Ghana the Gateway to West Africa. Tariff and
Non-Tariff barriers in Ghana continue to pose challenges to the
importation of a number of agricultural products. The GOG tariff rates
are ad valorem intended to reduce taxes on many products. The reliance
on ad valorem tariffs, as the main trade instrument contributes to a
more transparent trading regime. However import duties on some products
such as beers, wines, malt drinks and other alcoholic beverages continue
to be high. Around 15% of its tariff lines are bound in agriculture.
Extending the coverage of tariff bindings beyond agriculture would
benefit Ghana and its trading partners by increasing the predictability
of the tariff.

Additionally, Ghana continues to maintain strict product standard
requirements such as shelf life and labeling. Custom procedures are also
long and cumbersome. These requirements often negatively impact trade.

# SECTION 11: AGREEMENT COMPLIANCE

# 

## A. World Trade Organization

## Market Access 

The Government of Ghana (GOG) has progressively implemented a number of
import policies to promote greater trade liberalization over the past 10
years. Ghana became a member of WTO in 1995. As a founding member, GOG
has pledged to be in full compliance with its WTO commitments to improve
market access. Ghana, generally applies its trade policies and measures
on a non-discriminatory bases to all trading partners. However, the GOG
is also committed to the development of domestic industries that can
compete internationally. Though the GOG has made positive strides there
are significant problems that still remain and add to the cost of doing
business in Ghana. Efforts by the GOG must continue to reform its
cumbersome bureaucracy and eliminate unreasonable import standards.

## 

## Trade 

## Tariff Barriers 

Tariff remains Ghana's main trade policy instrument. Ghana, in
principal, applies an eight-digit tariff nomenclature according to the
Harmonized Commodity Description and Coding System as of 1 January
1990.  In practice, the classification coincides very closely to the
6-digit HS code description with sub-divisions at the eight-digit
classification level limited to only a few agricultural commodities.

The Ghana tariff system has four ad valorem import duty rates (0, 5, 10
and 20%), which became effective in January 2000.  The standard rate of
duty is 20% (for example rice and poultry).  The 10% rate is levied on
raw materials. The 5% rate applies to materials for the manufacture of
or prospecting for timber and other natural products. A general
exemption from payment of import duty (zero) can be granted on items
such as veterinary drugs for poultry and other livestock and ingredients
for manufacture of livestock and poultry feed certified as such by the
Ministry of Food and Agriculture. The import duty relief was part of
GOG's policy to increase the contribution of the livestock sector to the
economy. Exemptions are granted according to circumstances. But the
widespread use of discretionary exemptions, often administered under
poorly specified authority, is non-transparent. The GOG is rationalizing
such exemptions to ensure that the relief being granted is benefiting
the country.

In 2003 a 20% additional tariff was imposed on poultry and poultry
products but was not implemented due to resistance from the WTO. The
local poultry farmers have continuously put GOG under pressure to have a
protectionist policy for their industry.

A Value Added Tax (VAT) of 12.5% on the duty-inclusive value of all
imports was promulgated in March 1998 and became effective in December
1998. National Health Insurance Levy of 2.5 percent effective August 1,
2004 was also levied on all imports to be collected by the VAT
Secretariat. Raw foodstuffs are exempted from VAT. A processing fee of
1% of the c.i.f. value is imposed on goods that are statutorily exempt
from the payment of import duty. 

In addition to tariffs, the GOG levies fees on the value of imported
shipments in exchange for inspection, listing and classification. An
inspection fee of one percent is levied on all imports. An ECOWAS levy
of 0.5 percent is charged on all goods originating from non- ECOWAS
countries and 0.5 percent Export Development and Investment Fund (EDIF)
levy on all imports were introduced in 2000 and 2001 respectively. Ghana
Customs Network (GCNET) of 0.4% charge for computerization, processing
and documentation.

## 

In 2003, a 20precent additional tariff was imposed on poultry and
poultry products (making it 40%) but was not implemented due to
resistance from the business community. Since then, the local poultry
producers have consistently and continuously pressured the GOG to
implement the additional tax in order to protect their industry. In May
2005, the local poultry farmers took the GOG to court for failing to
implement the additional tax imposed on poultry imports. The court
advised that the GOG should support the poultry producers to enable them
to compete with imported poultry. A poultry producer's council is being
set up and it is to be managed by the poultry producers themselves.

## Non-Tariff Barriers

Ghana applies few formal non-tariff barriers. Certain import
prohibitions and controls apply for environmental, health, public safety
and security reasons and under international conventions. Ghana applies
no trade embargos. Ghana has eliminated the issuance of import license
before importation of all goods in order to improve access to its
market. For some agricultural food products (poultry), importers are
required to obtain permits from the Ministry of Food and Agriculture
(MOFA) before importation. However, the introduction of import permit by
the GOG of some agricultural products is restrictive because the
quantity and frequency of imports are controlled. According to the
industry, the GOG cuts down quantity of import and also cause undue
delays in the issuance of the permits. Another major threat to US
exporters of poultry meat is that the GOG is under pressure from
domestic poultry farmers to reduce imports to protect the local
industry.

In April 2000, Ghana replaced the mandatory pre-shipment inspection with
destination inspection, performed by two private contractors.
Documentation requirements were also simplified and more targeted
inspections introduced to facilitate imports. Price verification and
risk-assessment procedures are aimed at preventing duty evasion and
under invoicing. On average it takes approximately seven days for
shipments to clear customs.

## Sanitary and Phytosanitary Measures

Ghana is an important US agricultural export market and is a major
purchaser of US rice, poultry and wheat and high-value food products.
Ghana could expand its agricultural trade through the elimination of
tariff and non-tariff barriers. Shelf life standards required by GOG are
strict and do not recognize quality, safety, packaging and technological
differences between producers. Many food items entering Ghana should
have 50 percent or more of their shelf life remaining. Such standards
can have effect of blocking US exports to Ghana especially poultry and
high-value food products.

The testing of food products is not clear, uniform or transparent.
Routine inspection and analysis of imported foods at the port of entry
and at the retail level are undertaken to ensure that products are safe.
Expired agricultural products are removed from the market and destroyed
by the Food and Drugs Board (FDB), the GOG regulatory body.

## Product Specification

The GOG adheres to its food labeling requirements and does not impose
any specific restrictions on any packaging materials. However packaged
foodstuff should be stored and conveyed in such a manner as to preserve
its composition, quality, and purity and to minimize the dissipation of
its nutritive properties from climatic and other deteriorating
conditions. The GOG in 2000 issued a circular that prohibits importation
and locally produced vegetable oils labeled as 'non-cholesterol' or
'cholesterol free'. The circular also stated that vegetable oils should
bear the plant source of the oil and labeled as such, for example corn
oil, soy oil, and sunflower oil. The claim by the Food and Drugs Board
(FDB) is that all plant sources of edible oil are cholesterol free. An
importer of US vegetable oil was asked by the FDB to delete the 'No
Cholesterol' label on all the vegetable oils before he would be allowed
to sell the produce in his supermarket. This labeling issue is not very
clear and could affect US edible exports to Ghana.

## Labeling Requirements

The Government of Ghana (GOG) continues to enforce a product-labeling
law. All products must clearly identify in English the type of product
being imported, the ingredients or components, the country of origin,
and establish a date of expiration/Best before Use for perishables.
Labels can be printed on the package or be of a permanent adhesive type.
Products cannot show more than one date of manufacture or expiration
date on the package. Non- complying goods are subject to government
seizure.

## Shelf Life

In Ghana all products should carry expiry dates and/or shelf life. The
active ingredients should be specified on the packaging material where
applicable. The GOG requirement is that the expiry date should be at
least half the shelf life as at the time of inspection. Expired imported
goods are seized at the port of entry and destroyed. The shelf life of a
product is calculated from the date of production until the date of
completion of all customs procedures and import certification at the
Ghana port of entry.

## Product Standards

Ghana has issued its own standards for most products under the auspices
of the Ghana Standards Board (GSB), which subscribes to accepted
international practices for testing of imports for purity and efficacy. 
The GSB has promulgated approximately 160 Ghanaian standards and adopted
over 300 foreign standards for certification purposes. The Food and
Drugs Board (FDB) regulates, enforces and certifies food, drugs,
cosmetics, and other products that have health implications for the
consuming public. 

## Certification

Sanitary or health certificates are required for plants and seeds, live
animals, poultry (including eggs and day old chicks), meat, liquor.
Under the Disease of Animals Act 1961 (Act 83), imported animals,
carcasses and parts thereof must be free of disease. As such meat and
meat products must be accompanied by a certificate issued by the
veterinary department of the country of origin stating that: (I) the
animals from which the product is derived were free from infectious and
contagious diseases, (ii) the product has been inspected by the
veterinary authority and has been passed as wholesome and fit for human
consumption, (iii) the animals were slaughtered in an approved slaughter
house, and that (iv) the product is free from radioactive contaminants.

## OTHER TRADE AGREEMENTS

## 1. Trade Agreements with the United States

### Free Trade Agreements 

Presently, Ghana has no free trade agreements with the US. The GOG has
expressed its strong desire to enter into negotiations to establish an
FTA with the US and a number of policy discussions have been held
between the two countries.

### Trade and Investment Framework Agreement (TIFA)

In February 1999 Ghana and the US signed a Trade and Investment
Framework Agreement (TIFA)- one of the first of such agreements with a
country in sub-Saharan Africa. The TIFA is to establish a mechanism that
would facilitate concrete measures required to continue moving the two
countries to liberalized trade and investment. The agreement provides a
mutual bilateral economic relationship between the two countries and
seeks to encourage and facilitate private sector contracts between them.
The agreement consists of ten articles. The TIFA established US-Ghana
Council on Trade and Investment composed of representatives of both
countries. The Council meets regularly to discuss specific trade and
investment matters, providing a valuable mechanism for promptly
addressing these and other issues that may arise between the US and
Ghana.

## 2. Trade Agreements with ECOWAS countries

Ghana is a member and co-founder of the Economic Community of West
African States (ECOWAS), established in 1975. ECOWAS is made up of 15
member countries namely Benin, Burkina Faso, Cape Verde, Côte d\'Ivoire,
Gambia, Ghana, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Nigeria,
Senegal, Sierra Leone, and Togo. Mauritania opted out in 2000. The aim
of ECOWAS is to establish a customs union and a single currency among
members.  

Under a program of trade liberalization launched in 1979, tariff and
non-tariff barriers to intra-ECOWAS trade in some selected goods were
lifted provided that they appear on the list of products established by
the Community. However, member countries are not respecting the
timetable for implementation of these provisions. In an attempt to
revitalize the agreement, the ECOWAS Trade Liberalization Scheme was
established in 1990, with the goal of phasing out tariffs on specified
goods within five years. Pursuant to this agreement, Ghana has provided
tariff reductions of 20 percent on few goods from member countries.
ECOWAS foresees the establishment of a free-trade area and, ultimately,
a Customs Union, but it has made little progress to date. Ghana is
committed to regional integration, and wishes to accelerate such
initiatives.

## 3. Ghana-European Partnership Agreement

The EU is Ghana's biggest trading partner currently taking up 43 percent
of Ghana's exports and providing 40 percent of total imports in the last
five years. Total EU exports to Ghana in 2005 exceeded 2 billion Euros
of which 20 percent were in agricultural products. Ghana's exports to
the EU yielded about 140 million Euros of which 40 percent were in
agricultural products.

In June 2000, Ghana was one of 77 African, Caribbean and Pacific (ACP)
countries to sign the Cotonou Partnership Agreement (the successor to
the Lomé Convention), with 15 member states of the European Union (EU).
This agreement offers a non-reciprocal preferential trade agreement. As
a signatory to the ACP-EU Partnership Agreement, Ghana receives
non-reciprocal tariff and other preferences from the EU on many goods,
as well as substantial financial assistance.

Since September 2002 the EU and the ACP including Ghana have been
negotiating for Economic Partnership Agreements (EPA). The EPA is aimed
at establishing new WTO compatible trading arrangements progressively
removing barriers between EU and ACP countries. These negotiations are
expected to result in new Free Trade Agreements (FTA) by 2008.

##  4. Ghana Bilateral Trade arrangements

Ghana has bilateral arrangements with several trading partners, such as
Malaysia, the Czech Republic, and Côte d\'Ivoire, and is negotiating
more, including with Romania, Greece, Burkina Faso, Zimbabwe, and Libya.

# Section III. Trade Barrier Catalog

There is no trade barrier catalog available.

# Section IV. Reference Material

# Import Tariff Rates (Table A)

+-----------------------------------+-----------------------------------+
| **Commodity**                     | **Import Tariff**                 |
+-----------------------------------+-----------------------------------+
| Poultry                           | 20%                               |
+-----------------------------------+-----------------------------------+
| Rice                              | 20%                               |
+-----------------------------------+-----------------------------------+
| Wheat                             | 20%                               |
+-----------------------------------+-----------------------------------+
| Sea food                          | 5%                                |
+-----------------------------------+-----------------------------------+
| Beef                              | 20%                               |
+-----------------------------------+-----------------------------------+
| Cow leg                           | 20%                               |
+-----------------------------------+-----------------------------------+
| Fresh fruits (Apples, grapes)     | 20%                               |
+-----------------------------------+-----------------------------------+
| HVP (Breakfast cereals, drinks,   | 20%                               |
| juices, edible oils,              |                                   |
|                                   |                                   |
| Canned seafood and meat, canned   |                                   |
| fruits & vegetables, pastry       |                                   |
| cakes, biscuits, pasta, tomato    |                                   |
| puree, ketch up etc               |                                   |
+-----------------------------------+-----------------------------------+
| Veterinary Drugs, animal feed     | 0                                 |
| ingredients                       |                                   |
+-----------------------------------+-----------------------------------+
| Wines, Beer, malt                 | 40%                               |
+-----------------------------------+-----------------------------------+

# SECTION IV: REFERENCE MATERIAL

For further information regarding specific Trade policy issues, contact
FAS/Accra.

Agricultural Affairs Office

U.S. Embassy

Public Affairs Complex

Ridge Roundabout

PO Box GP 2288

Tel: 234‑1‑261-3926

Fax: 234-1- 2629835

e‑mail: <aglagos@usda.gov>, <agaccra@usda.gov>, <AshiteyEZ@state.gov>

Tel: 011-233 244331507, 233 21231218