The Minority Caucus in Parliament has raised concerns over the recent 10% tariffs imposed by the United States on Ghanaian products, calling on the government to take urgent action to mitigate the impact on local exporters.
In a statement issued by the Ranking Member of the Trade, Industry, and Tourism Committee, Michael Okyere Baafi, the Minority described the tariff escalation as a serious threat to Ghana’s trade competitiveness.
The new tariffs, announced by U.S. President Donald Trump, are reportedly in response to Ghana’s 17% average tariffs on U.S. imports.
Ghana, along with 35 other Sub-Saharan African nations, benefits from duty-free access to the U.S. market under the African Growth and Opportunity Act (AGOA). However, the Minority Caucus fears that the new tariffs could undermine Ghana’s export advantages, especially if AGOA’s preferential trade terms are affected.
“The introduction of a 10% tariff on goods that previously entered the U.S. duty-free will likely reduce the price competitiveness of Ghanaian products in the U.S. market. This affects products that were already subject to standard U.S. import duties and could be further impacted if AGOA is affected by this measure,” the statement read.
The Minority emphasised that the previous New Patriotic Party (NPP) government had prioritised initiatives like the African Continental Free Trade Area (AfCFTA) and the One District, One Factory (1D1F) policy to mitigate trade shocks and reduce reliance on the U.S. market.
“Diversifying our product range to focus on the export of manufactured goods to other African countries was a key policy of the NPP government. Through the implementation of 1D1F, Ghana increased exports of products like iron rods, ceramic tiles, and plastics to the ECOWAS region,” the statement added.
The caucus, however, criticised the current National Democratic Congress (NDC) government for lacking a clear policy direction on exports.
“Unfortunately, we have not seen a clear export policy under the NDC government. Their response to this sweeping tariff from the U.S. is critical to our exporters, especially those in the apparel industry, which employs over 5,000 young people,” the Caucus noted.
The Minority Caucus also warned that the absence of a strategic response could significantly impact Ghanaian businesses, leading to job losses and economic instability. They urged the government to act swiftly to protect the country’s trade interests.
Recommendations from the Minority Caucus
In light of the current trade developments, we [Minority] propose the following measures for the government’s urgent consideration:
Diversification of Export Markets
• Prioritize the full implementation of the African Continental Free Trade Area (AfCFTA) to diversify export markets and reduce dependence on the U.S.
• Expand exports of manufactured products to other African countries.
• Prepare to leverage trade diversion opportunities resulting from retaliatory measures imposed by major trading partners.
Support for Exporters
• Develop targeted programs and policies to assist exporters affected by the new tariffs.
• Provide financial support, training, and market intelligence to help businesses adapt to changing trade conditions.
• Advocate for the extension or replacement of AGOA to ensure continued preferential access to the U.S. market.
Product Diversification and Value Addition
• Encourage the expansion of Ghana’s export base to reduce reliance on a limited number of commodities.
• Promote value addition to raw materials to increase export earnings, boost competitiveness, and enhance local consumption.
Negotiation and Diplomacy
• Seek clarity on the implementation of these tariffs and their potential impact on AGOA’s extension.
• Engage in diplomatic negotiations with the U.S. government to seek a reduction or removal of the tariffs.
• Highlight the negative economic implications of the tariffs and emphasize Ghana’s commitment to fair trade and sustainable development.
Enhancing Competitiveness
• Improve the efficiency and productivity of local industries to lower production costs and increase global competitiveness.
• Invest in critical infrastructure to reduce transportation costs and improve market accessibility.
Policy Clarity
The government must articulate a clear policy direction on exports and outline its response to the U.S. tariffs.
Ensure that the National AfCFTA Policy Framework and Action Plan receive adequate funding and are effectively implemented.
SP/MA
