European Union External Action

Ghana and the EU

Ghana gained its independence from the United Kingdom as the first sub-Saharan country on 6 March 1957. It has achieved remarkable progress in deepening its democracy since the return to democratic rule in 1992. It has experienced peaceful transitions of power between different parties following democratic elections trice, the most recently one being the 2012 elections.

Ghana and Europe are bound together by common history, interlocking cultures, and shared objectives. They have a long history of a prosperous partnership enhanced by an existing framework for political dialogue. This practice has been strengthened under the 2nd revision of the Cotonou Agreement.

Since the entry into force of the EU Lisbon Treaty in 2010 and the creation of the European External Action Service (EEAS), the political dialogue has been coordinated by the EU Delegation on behalf of the High representative of the EEAS and takes place on a regular basis between the EU ambassadors and the Government of Ghana.

In line with the Paris Declaration and the Accra Agenda for Development other platforms for dialogue and coordination among Development Partners (DPs) have been established in Ghana: the Heads of Mission (HoM) and the Heads of Cooperation (HoC) Groups. These groups allow Development Partners (DPs) to coordinate among themselves in order to jointly align their development programmes and activities to national priorities and strategies.

Ghana has witnessed impressive economic growth with annual growth averaging over 6.4% since 2000 and attained (lower) middle-income country status in late 2010 after a rebasing of its national accounts. Estimates from Ghana's Statistical Service from April 2013 show that in real terms, the Ghanaian economy expanded by 7.9% in 2012 which compares well with an average global growth of 3.2% and an average sub-Saharan African growth of 4.8% in 2012.

Ghana's growth has been largely driven by expanding service and industrial sectors, notably due to the start of oil production in 2010, a growing construction sector and continuously strong mining activities. Projections made by the International Monetary Fund (IMF) show a growth rate of 6.9% in 2013 and an expected average annual growth rate of 6.3% in the period from 2013 to 2018 .

Ghana is becoming increasingly engaged in international trade with Ghana's total external trade in US Dollar terms increasing by over 70% over the last five year. The EU continues to be the most important trade partner for Ghana, accounting for around 30% of Ghana's total external trade in 2012. Foreign Direct Investment (FDI) inflows to Ghana have also increased significantly in the past few years, with Ghana featuring among the top five recipients of FDI into Africa in 2012, according to the  World Investment Report 2013.

Ghana is engaged in international trade at the multilateral and regional level through participation in the World Trade Organisation (WTO), regional integration processes both within the wider African framework (African Union) and the sub-regional Economic Community of West African States (ECOWAS) as well as with the European Union through the EU-ECOWAS Economic Partnership Agreement (EPA).

The trade policy environment is completed by the domestic policies of the Government of Ghana on trade, industrial and private sector development, on which the Ministry of Trade and Industry is the lead policy advisor with responsibility for the formulation and implementation of policies for the promotion, growth and development of domestic and international trade and industry.

Ghana has seen a significant increase in its trade with the rest of the world, experiencing an increase of over 60% in total trade value over the period from 2010 to 2014. The nominal value of imports has increased by over 40% and consisted mainly of manufactures. The value of exports increased by over 120% during the same period, consisting mainly of agricultural products (cocoa, fish, timber) and products from the extractive industries (gold and since 2010, also oil).

The EU is in a prime position when it comes to global trade. The openness of the EU's trade regime has meant that the EU is the biggest player on the global trading scene, accounting for around 16.4% of the world's import and exports in 2014. The EU is the most open to developing countries in the world. With fuels excluded, the EU imports more from developing countries than the USA, Canada, Japan and China put together. The EU continues to be a major trading partner for Ghana. The EU is the leading destination for Ghana's exports and the second largest source of Ghana's imports. Ghana's total bilateral trade with the 28 member states of the EU reached EUR 6 billion in 2014, which constituted over 20% of Ghana's total external trade in that year.

In 2014, EU exports to Ghana were dominated by machinery and transport equipment and mineral fuels. The structure of the European Union's imports from Ghana, traditionally predominantly agricultural products, has seen a shift with the advent of commercial oil production in Ghana in 2011, the import of which constituted a share of around 42% of all imports from Ghana to the EU in 2014. 

The EU is committed to supporting Ghana and other Africa Caribbean Pacific (ACP) countries integrate into the world’s trading system with a view to expanding their trade and also to enabling the countries benefit from the global economy. This is why the EU and its Member States negotiated the Economic Partnership Agreements (EPA) with West Africa concluded in July 2014. 

The EU and Africa Caribbean Pacific (ACP) countries 

Since 1975 with the first Lomé Convention, the EU has granted non-reciprocal trade preferences to its African, Caribbean and Pacific (ACP) partner countries. However, this type of trade relationship between the EU and the ACP countries could not be continued.

In the Cotonou Agreement of 2000, the EU and the ACP countries therefore agreed to replace the previous non-reciprocal preferences by WTO compatible reciprocal trade arrangements in the form of the Economic Partnership Agreements (EPAs).

There are two types of EPAs: Regional EPAs and interim EPAs. The EPAs are designed on a broader basis than just a free trade agreement. They have also objectives concerning:

  • Development and economic growth through trade and economic reforms.
  • Regional integration as a key step towards further integration into the world economy.
  • Eestablishing a level playing field between ACP and non-ACP developing countries.
  • The EU market will be open to ACP goods completely and immediately. 
  • Differentiation, as each EPA will reflect the specific needs and interests of its target region.
  • Building long-lasting political, economic, and development relationships

Voluntary Partnership Agreements

Illegal logging has a devastating impact on some of the world's most valuable remaining forests and the people that live in them and rely on the resources they provide. The European Union (EU)'s response to tackling illegal logging was set out in the Forest Law Enforcement and Governance, Trade (FLEGT) Action Plan in 2003. The cornerstone of this policy is the FLEGT VPA which is a bilateral agreement between the EU and a timber exporting country that seeks to promote sector governance and ensure that timber products imported into the EU have complied with the legal requirements of the partner country.

The EU is Ghana’s most valuable market, accounting for 43% of the value of total exports and 33% of total volume in recent years.  Funding to assist Ghana in the implementation of the agreement is provided through a multi-donor sector budget support by France, the Netherlands, the UK, the World Bank and the European Commission. This is in addition to Ghana’s own funding.

Related Links: Illegal-Logging. info

The EU-ECOWAS Economic Partnership Agreement

The Economic Partnership Agreement (EPA) negotiations with West Africa, formally opened in 2003, have been concluded in July 2014 with the initialing of the Agreement. The West Africa regional configuration consists of ECOWAS (Economic Community of West African States) and Mauritania. ECOWAS numbers 15 countries – Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, Togo, Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria, Sierra Leone – the first eight being members of WAEMU (West Africa Economic Monetary Union).  To read more about  ECOWAS click here.

Link to the full regional EPA: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014PC0576

Other useful links:

TRAQUE: http://www.traqueghana.org/

BUSAC: http://www.busac.org/

GESP: https://ec.europa.eu/europeaid/sites/devco/files/annex2-ad1-ghana-2015_en.pdf 

Regional Indicative programme 11th EDF: https://ec.europa.eu/europeaid/sites/devco/files/eeas-2015-rip-west-africa_en.pdf

Ghana's objectives are to build a middle income economy and to go beyond the middle income status by achieving the Millennium Development Goal (MDG) targets, offering better jobs, diversifying the economy and reducing disparities between the regions.

Ghana has already made significant strides in that direction: the poverty level has been considerably decreased and Ghana is likely to be the 1st Sub Sahara African country to achieve the 1st MDG, halving extreme poverty, well before 2015. However, further efforts are needed to address the MDGs related to child and maternal mortality, and access to sanitation. In October 2012, the European Commission signed a health sector budget support of  EUR 52 million to assist Ghana in its effort to achieve MDG5. This support comes as additional resources to Ghana and became available under a special European Commission MDG-initiative to aid countries lagging behind in the attainment of some of the MDGs.

Since 1975 the European Commission has provided an estimated amount of EUR 1,200 million in terms of development aid to Ghana. At present around half of all Official Development Assistance (ODA) received by Ghana is financed by the EU (both European Commission and EU Member States). Contrary to World Bank, African Development Bank and some other major donors, the overwhelming majority of the ODA that stems from the EU is provided in the form of grants, meaning that the Ghanaian Government does not have to repay any of the allocated funding. 

European Development Fund (EDF)

As far as the Africa, Caribbean and Pacific (ACP) countries are concerned, the main source of EU funding is the five year European Development Fund (EDF), which at present is in its 10th edition (2008-2013). For all ACP countries together a total amount of EUR 21.966 billion is available in the 10th EDF, which is completely and directly sourced by the EU member states.

The EU is committed to the principle of ‘ownership’, i.e. that partner countries are fully involved in the process of developing the strategies and programmes which affect them. 

This allows the EU’s development assistance to be flexible and adaptive, responding to the specific needs of the beneficiary countries. This results in an agreed Country Strategy Paper (CSP), which includes a multi-annual National Indicative Programme (NIP)

 

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