GHANA-BACKGROUND

There are expanding market opportunities in the global marketplace for small producers and exporters of fruits and vegetables in developing countries. By targeting global supermarket customers (as well as domestic and regional markets) with improved quality and the adoption of needed grades and standards, small stakeholders in developing countries are becoming more competitive.

Ghana is typical of many developing countries, where growers have little direct contact with the international market. They trade through exporters and importers, and often have little insight into price formation or market demands. As such, they may lack sufficient information, negotiating positions and market presence to the ultimate customers. The European Union is currently the primary market for Ghanaian goods. Therefore, much of the focus of assistance to Ghana in the horticultural sector needs to be directed toward gaining entry and maintaining market share in the European market. Moreover, Ghanaians need to become aware of the differences between the trade requirements for the U.S. and EU market channels.

The World Bank suggests that an export strategy for Ghana, given its present stage of development, should be based on two basic principles: maximizing returns to current comparative advantages; and, over time, "catalyzing" export diversification toward more sophisticated sources of advantage. Opportunities for improved profitability are especially strong for niche specialty products where production methods require relatively intensive labor inputs. Moreover, the further processing and packaging (value-added steps) of fruits and vegetables will provide additional jobs and greater income for those participating in the horticultural sector. Realizing these profit opportunities, however, will require increasing levels of sophistication for farmers to comply with elevated product requirements of international and domestic markets.

Yet, to date much of the expansion in Ghana's non-traditional exports reflects sporadic foreign investments in key agro-processing activities - which enjoy preferential treatment in European markets. The value added of these exports seems marginal, and therefore unsustainable, should such preferences be removed. Therefore, Ghana needs to create a more favorable business environment to attract foreign investment and to raise competitiveness of exporting firms.

In order to create a business environment that will bolster the competitiveness of Ghana's producers and exporters, participants need to be aware of global trends. For example, Ghana will increasingly be responsible for complying with a growing number of EU regulations on environmental, and food safety standards. Similarly, global sourcing in the food industry requires moving food products through supply chains in a timely manner. Hence, improvements in organization, logistics and telecommunications are needed as well.