In the run up to the debate in Parliament, many companies who are today engaged in exporting to the European market made a strong case for the EPA. However there were also calls for a cost benefit analysis to be carried out. In fact such an analysis was made in 2015, when the World Bank carried out a detailed study assessing the Economic Impact of the ECOWAS CET and Economic Partnership Agreement on Ghana.
This study showed that the EPA is estimated to increase profitability for 77 percent of firms in the manufacturing sector, mainly through lower input prices and prices for capital equipment. An estimated 84 percent of workers in the manufacturing sector are employed by firms that benefit from implementation of the EPA. As benefits occur mainly through lower prices for imported inputs and capital equipment, rather than higher output prices, there is no harm to consumers and there is potential for a longer-term boost in productivity and growth. This is consistent with the focus of the EPA being to target tariff reductions on inputs and intermediate products which favours local manufacturers.
The study predicts that there may be some profit losses for some firms, yet very few manufacturing firms become unprofitable as a result. As the liberalization takes place very gradually over many years, firms will have the time to upgrade and restructure in order to adjust to the new environment.
Continued duty-free access to the EU market particularly benefits many of the priority sectors in Ghana’s National Export Strategy, 2013-17. The priority sectors include processed cocoa products, fruit and vegetable products, and fish.