Ghana, UK finally reach post-Brexit trade deal

The UK government released an official statement on February 4, 2021, saying that the UK and Ghana have finally reached a trade agreement. The Department for International Trade also added that the conditions of the new trading relationship will be similar to those before Brexit came into effect (December 31, 2020).

The two countries have yet to sign a formal agreement, but have reached consensus on the terms of the new agreement. The negotiations have finally concluded and the Ghana-UK Trade Partnership Agreement will come into force after the two countries complete the necessary internal procedures and documents.

What’s in the new agreement

While the exact content of the new agreement is still unclear, the Ghanaian and British governments listed the key points of the document in a statement.

Ghana will get duty-free and quota-free access to the UK market, while UK exporters will enjoy preferential shipping reductions into the Ghanaian market. It seems that both countries are equally happy about this trade agreement as its mutual benefits are obvious.

ECOWAS

Ghana and the United Kingdom also expressed their desire for development cooperation and commitment to human rights. Department for International Trade Adding that the long-awaited agreement further underscores “the importance of the integration of West African countries within the framework of the Economic Community of West African States (ECOWAS), and the integration of African countries within the framework of the African Continental Free Trade Area. The agreement further underscores their shared desire to strengthen relations between the UK, ECOWAS and African countries more broadly.”

The Economic Community of West African States (ECOWAS) is a 15-member body in West Africa that shares common economic interests and enduring cultural and historical ties. On February 4, 2021, Ghanaian President Nana Akufo-Addo will be re-elected as ECOWAS Chair for another year. Akufo-Addo will oversee the implementation of reforms to the organization.

What is the price of the new agreement?

International Trade Secretary Liz Truss has announced a trade deal between the UK and Ghana worth £1.2 billion (about $1.65 billion). The Ghana-UK deal is part of efforts by Boris Johnson’s cabinet to secure as many trade deals as possible after Brexit.

Liz Truss’s department has been quite successful in this endeavor, signing more than 60 trade deals in 18 months, a record for any British cabinet. The deals are worth a total of around £885 billion ($1.2 trillion).

Challenges Ghana faces as Brexit is formally implemented

Despite the record achievement of the UK Department for International Trade, the consensus reached between Ghana and the UK has not been smooth sailing. In the aftermath of Brexit or in the first few days of the new year, goods from continental Europe and other countries were stranded at the UK border.

While the UK signed the “divorce documents” with the EU shortly before Brexit became a fact, so imports and exports between the two countries could begin, other countries such as Ghana were not so lucky. Although Ghana and the UK reached a consensus in December 2020, the actual text was not finalized until a few weeks later.

This unstable situation is costly for Ghanaian companies as they tried to import products in the first days of Brexit implementation. For example, Golden Exotics, a banana producer based in Accra, Ghana, had to pay more than £17,500 ($24,000) in tariffs. The company is one of the few employers in the region, providing work for 3,000 people. George Kporye, the administrative manager of Golden Exotics, believes that the tariffs should be waived considering that the two countries have agreed on the terms of the agreement. He also added that Ghana and the UK should do everything to speed up the legal process and sign the trade partnership agreement, and that his company is reducing production due to the uncertainty of Brexit.

Kporye is one of many people affected by Brexit and the failure to reach a formal agreement with the UK. However, this has surprised many economists who had expected the UK to prioritize Commonwealth countries such as Ghana. After all, Commonwealth countries would be key trading allies for the UK, which has already faced the cold shoulder from the EU. Still, the agricultural products such as oil, fish, cocoa and fruit that Ghana can provide are vital to British supermarkets and are worth £498 million ($682 million), while UK exports to Ghana are worth £722 million ($988 million).