Exporting non-traditional produce - problems and perspectives

The aim of the research is to give a better understanding into the overall dynamics of the non-traditional export business. Specifically, it will seek to highlight the problems in the growing industry and find out what is being done to solve them so as to assure potential exports of the viability of this opportunity. In doing so, the research also seeks to re-awaken and encourage exporters already in the business, especially the newer ones to be steadfast in their practice of this new discovery of a national development strategy. The development of the non-traditional export sector has been overwhelmingly identified as one of the main solutions to Ghana’s Balance of Payment problems. It has been identified as one of the solutions to unemployment, the distortions in the prices of labour and price of commodities. It also falls in line with private sector development and also-forms part of the on-going adjustment programme anchored on market reforms. With the shift from rigid state control to market-oriented activities, producers and exporters have risen to take advantage of the various opportunities including access to foreign markets which have been created. Exporters as well as other businessmen have now realised that trade flows need the right environment within which to grow and once that environment exists the enterprising businessmen and women will rise to exploit the opportunities. Quite a number of Ghanaians in the past few years have gone into non-traditional exports. Some have taken advantage of the boom and have made huge profits in a relatively short time probably because of the right approach used; but even here, they could have done better. The number of registered exporters rose from 1,620, with 164 export items in 1993 to 2,000 within 177 items in 1994.1 Many others have lost out completely for lack of adequate insight into this growing opportunity leading to the realisation of the numerous challenges at a rather late stage of the process. Despite the boom, in the non-traditional export business, its percentage to the total export is still quite low. At the end of 1993 total outputs stood at 1.728 billion dollars as against about 1.063 billion dollars for total exports (exports here mean both traditional and non-traditional) (Refer to Figure 1*). This shows a gap of 665 million dollars. And this balance is deficit which needs to be closed. In 1993 total non-traditional exports was 71.69 million dollars. (Refer to Figure 2*). If this is compared to total exports (1.020 Billion Dollars) non-traditional exports contributes a very small amount. So in order to close the gap non-traditional will have to produce more. Also despite the boom, some people are holding a lot of money but are unable to find appropriate investment in areas such as the NTE’S. This is because they have a limited knowledge of what it entails to be in this sector. On the other hand, others have under-estimated the implications of entering the non-traditional exports sector and have crashed out fast for lack of adequate insight leading to great financial losses which could have been invested in more familiar sectors.

Source: KNUST