Import/Export, Wholesale and Retail Trade
Import, export, and wholesale and retail trade are lucrative industries in Ghana with large, inelastic markets. Retail is slightly less capital intensive than import, export and wholesale and therefore more local businesses are attracted to it.
The import industry has high potential for investors. At its current rate, local production in most sectors is not enough to satisfy local consumption and therefore import rates will continue to grow until the country can produce in-demand goods at competitive prices. Import is expected to make up 6% of GDP in 2010.
Exports of non-traditional products such as fruits, vegetables, spices, nuts and handicrafts are growing at a high rate. Export of non-traditional products brought in $400 million between January and March of 2010 and international demand for them is high. Other exported products include cocoa beans, timber, and minerals. The discovery of oil in Ghana is expected to increase the export industry’s share of GDP to about 5%. In the past, export has accounted for between 2% and 3% of GDP, which is pegged against the growth of domestic products.
The top five players in the import, export, and wholesale and retail trade industries are:
- Finatrade (Import/Wholesale)
- Forewine (Import/Wholesale)
- Melcom Shopping Centre (Retail)
- Maxmart Shopping Centre (Retail)
- Pioneer Cannery (Export)
Foreign partnerships (first and second class) are boosting growth. The business landscape is seeing many partnerships being formed between competing businesses in order to gain market share. The industry also has many trade exhibitions and conferences that bring together the major players and smaller businesses.
- Lack of flexibility with the state bodies that are responsible for the industry.
- Cost of documentation is high and the required processes are burdensome.
- Businesses face high tax levels, tariffs and capital demands.
- Real estate shortages exist in both warehousing and retail space.
- Currently no industry association is in place to address these issues.
- Investment in commercial real estate would greatly impact growth in the industry.
- More flexible policies from governing bodies would attract more foreign partners.
- Financial institutions could tailor products and services to the needs of the industry and provide more help with capital needs.
- Increased use of E-trade platforms would increase speed and accuracy of transactions.
- Increased acceptance of credit cards would facilitate transactions and growth.
- There is a large market for foreign investment to enhance the value of Ghana’s natural resources. While Ghana is rich in raw materials, these materials are often imported by manufacturing businesses because they are difficult to obtain locally. Ghana lacks much of the skills and machinery necessary to gather and process raw materials for local use. Investors are needed to set up processing facilities so that Ghana can benefit from exporting more value-added goods. Gold and other minerals are among the most valuable potential exports, and the majority of gold mined in Ghana is exported in raw form. Lucrative investment opportunities exist in setting up refineries and production facilities to make jewelry and other products for export.