African Exporters: Ghana Out Of Top 10

Ghana is missing among the top ten Sub Saharan African exporters to China, a study has revealed. Despite strong ties between the two countries, Ghana has failed to take advantage of the Chinese economy, the second biggest in the world. In recent times, Ghanaian traders have been travelling to China to undertake trade transactions, bringing in items such as clothing, home appliances among others. But according to data from China’s Ministry of Commerce capturing trade data for 2014, Ghana’s exports to China is quite insignificant despite exporting key commodities such as metals and cocoa beans. Out of the Sub Saharan African countries, South Africa is the leading exporter to China with about 40per cent of China’s total imports from Sub Saharan Africa. Angola placed 2nd with about 28 per cent of Sub Saharan Africa’s total exports to the Chinese market while Sudan, Republic of Congo and Equatorial Guinea placed 3rd, 4th and 5th with about 7, 5 and 3 per cent respectively. The rest of the top 10 Sub Saharan African countries are Zambia (6th), Democratic Republic of Congo (7th), Nigeria (8th), Sierra Leone (9th) and Mozambique (10th). China accounts for about one-fifth of the global economy, but the report said the move to devalue its currency, the Yuan, sparked concerns that the economy might be worse than previously envisaged, resulting in a sell-off in Chinese equities. Ecobank Research said “undoubtedly, as Africa remains a key source of raw materials for China, the China-induced slump in global commodity prices will have major implications for many African economies especially for the region’s top 10 commodity exporters to China.” It added that commodity prices have eased, putting downward pressure on the fiscal and external positions of some economies in the region, mainly, Zambia, Ghana, Nigeria and Angola. “In particular, the prices of key base metals such as aluminium and copper - usually used in China’s construction and manufacturing sectors, which are already experiencing deep levels of overcapacity - have slowed to six-year lows, falling 19 and 27per cent respectively. Oil prices have also dropped to a six-year low, reaching close to the level last seen during the 2008-09 financial crisis. Amid weaker commodity prices and export receipts, economic activity in key African countries such as Nigeria, Angola and Zambia are likely to slow down in 2015, weakening business prospects. Moreover, the fall in commodity receipts, alongside growing signs of the US’ strengthening recovery, which has triggered a rise in capital outflows from key Middle African economies since May 2013 as demand for US dollar-denominated assets increased, will heighten exchange rate volatility. Key countries such as Kenya and Ghana are already witnessing this trend although domestic factors are also at play.

Source: The Finder