PAHS/ADMIN 054:

EXPORT ADMINISTRATION

LECTURE 1:
INTRODUCTION TO EXPORT ADMINISTRATION

LECTURER:
Ebenezer Odame Darkwah
[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 COURSE OUTLINE

Session 1: Session 2:
Introduction to
Export
Theories of Competitiveness
Administration
Internationalization of Firms

Session 3: Session 4:
Session 5:
Non-traditional
Trade & Economic Exports,
Institutional
Development Procedures &
Setting of Exports
Strategies Documentation
 COURSE OVERVIEW

• The foundation of this course (export administration ) rests on the

processes of internationalization.
• The course will among other things;
– provide some basic theories which will aid in understanding the
processes of internationalization
– give you a fair idea about why some countries perform better in the
export market than others
– examine the regulations and processes governing the export business,
the administrative machinery for exports, and the challenges posed by
the export environment in Ghana
– discuss the roles of institutions concerned with the export business as
well as existing administrative incentives for enhancing exports in
Ghana
 EXPECTED OUTCOMES

By the end of this course, students will be expected to:

–explain basic theories that apply to export

–discuss, from the private sector’s perspective, the meaning

and challenges of the competitiveness of Ghanaian firms;

–discuss Non-Traditional Exports (NTEs) and their relevance

to Ghana’s economy

–outline export procedures and documentation and the

institutional setting of export in Ghana.
 INTRODUCTION TO EXPORT
ADMINISTRATION
–Introduction
–Why the need to study export administration
–What is export administration?
–The role of exports in development
–Why the need for exports?
–Some basic terminologies in export
administration
–Trial questions
 WHY STUDY EXPORT ADMINISTRATION?

• To understand the relevance of export in economic

development

• To gain knowledge about international trade

• To understand how export businesses are managed in Ghana

• To understand the various challenges confronting export

administration in Ghana

• To get familiar with the various export processes

 WHAT IS EXPORT ADMINISTRATION?

• Export Administration is the fusion of two words ‘export’ and

‘administration.’

• Export in international trade connotes selling of goods and

services produced in a home country (Ghana) to another
market/country (USA, Germany, Japan, etc.) by following
legal rules for trade purposes.

• Administration, on the other hand, looks at the management

of day-to-day activities or to look after a series of activity or
tasks. It means planning, organizing, directing, controlling
and coordinating the specific activity to achieve its objective.
 EXPORT ADMINISTRATION

• In that regard, Export Administration looks at

– the day-to-day management in the airlifting/shipping of goods
and services out of one part of a country to another country.
– The regulations and processes governing the export business in
Ghana
– The roles of institutions concerned with export businesses
– Challenges confronting export businesses

• Export administration is basically planning, organizing,

coordinating and controlling all activities relating to
export of goods, technology, and services from one
country another or to other counties.
 EXPORT ADMINISTRATION (cont’d)

• Export administration means managing export marketing activity

efficiently, smoothly and in an orderly manner to ensure compliance
with laws and regulations,. It is concerned with international
marketing activities and operations.

• Export administration means finding opportunities for marketing

goods, technology, and services in foreign markets and exporting
such opportunities for the benefit of an exporting firm, subject to
existing export rules and regulations.

• The seller of such goods and services is termed as an exporter, who

resides in a home country to another individual or institution or
agency overseas known as the importer.
 WHY THE NEED FOR EXPORTS?
(Benefits to the exporting country)
• Exports enable the country to earn foreign exchange which can be utilized
in the import of consumer goods, raw materials, spares and components,
capital goods and technology as well as servicing of external debts.

• Exports help to develop international ties with importing countries

through international trade, trade talks and trade agreements.

• Exports helps a country to solve and improve its balance of payments

position.

• Exports bring reputation and goodwill for a nation in the international

markets.
– For instance, Ghana commands reputation and goodwill when it comes to gold,
diamond, bauxite and rosewood among others.
 WHY THE NEED FOR EXPORTS? (cont’d)
(Benefits to the exporting country)
• It generates employment
– direct employment in the export sector and
– indirect employment in the supporting sectors such as banking,
insurance, transport, etc.

• Exports facilitate regional development of countries.

The foreign exchange earned is used to develop other
parts of the country.

• It helps boosts economic growth/growth in local

economies
 WHY THE NEED FOR EXPORTS? (cont’d)
(Benefits to the exporting firm/organization/industry)
• Exports enable business units to export quality goods at higher
prices and thereby raise their profit margin.

• Exports help business firms to spread their market risk, thus loss in
domestic market can be compensated by the profit earned in export
market and vice versa.

• Export administration enables a firm to improve its organizational

efficiency.
– For example, firms must emphasize on training and development of
employees. This helps to improve knowledge, attitudes, skills and social
behaviours. Therefore, the overall efficiency of the organization improves
due to training, research and other much activities which are encouraged by
export management.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION
• Absolute Advantage refers to a situation where a
country or company is more efficient (using fewer
resources) at producing the same good or service than
another country or company.

• Bill of Lading is a document issued by the shipping

company upon shipment of the goods. It is a contract
between the shipper (exporter) and the shipping
company for the carriage of goods to the port of
destination.
SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Certificate of Inspection is a document certifying
that merchandise (such as perishable goods) was in
good condition at the time of inspection, usually
immediately prior to shipment.
• Certificate of Manufacture is a document in which
a producer certifies that the manufacturing has been
completed and that the referenced goods are now at
the disposal of the buyer.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Certificate of Origin (COO) is a document that
declares that the goods which are being exported
are manufactured in a specific country.

• Commercial invoice is the statement of account

sent by the seller to the buyer and is prepared on
seller’s letter-head. It is an exporter’s bill for the
goods shipped.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Comparative Advantage is a concept which holds that a
country or region should specialize in the production and
export of those goods and services that it can produce
relatively more efficiently that other goods or services
and import those goods and services in which it has a
comparative disadvantage.

• Consular Invoice is a certificate issued by the Trade

Consulate of the importer’s country stating that goods of
particular value are being imported from a particular
country by a particular importer.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Customs Bonded Warehouse is a warehouse authorized
by customs authorities for storage of goods on which
payment of duties is deferred until the goods are
removed for domestic consumption.

• Customs Entry Form is a form used for compiling

statistic on the volume and value of exports.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Demurrage refers to the extra charges paid to a
shipowner or carrier when a specified period for
loading/unloading is exceeded.

• Export License is a license normally required for export

of raw materials, goods in short supply, antique etc. or
other goods related to national security.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Packing List is a document that includes details about the
contents of a package. The packing list is intended to let
transport agencies, government authorities, and customers
know the contents of the package.

• Letter of Credit (L/C) is a document issued by the

importer ́s bank stating its commitment to honor a draft,
or otherwise pay on presentation of specific documents by
the exporter within a stated period.
 SOME BASIC TERMINOLOGIES IN EXPORT
ADMINISTRATION (cont’d)
• Shipping Bill is the main documents on the basis of
which the custom’s permission for export is given. It is a
multi-purpose documents used as application for export
of goods, as dock challan and for claiming duty
drawback and other export incentives.
 TRIAL QUESTIONS

1. What is export administration? Discuss the relevance of

Export Administration as a discipline.

2. Comment on the view that Export Administration is of

little importance in development.

3. Write short notes on any five basic terms you know in

Export Administration.
 PAHS 054:
EXPORT ADMINISTRATION

SESSION ONE: THEORIES OF INTERNATIONALIZATION

LECTURER:
EBENEZER ODAME DARKWAH
[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 OUTLINE

Network Theory
Stages theory
Theories of • Attributes
Internationalization • Merits
• Attributes
• Limitations
• Limitations
1. Stages theory
2. Network theory
 INTRODUCTION
• Internationalization is the process of increasing the involvement of
enterprises in international markets.
• Internationalization is not a static but a dynamic process. It involves
– Entry into new markets
– Variation and standardization of products
– Changes in mode of operations
• Albaum et al. (2005) define internationalization process as the
successive development in a firm’s export engagement in terms
of
– the geographical spread in the markets, products and operation forms,
– the change in export management philosophies and.
– organizational behaviour from the beginning of the process to the end
 THEORIES OF INTERNATIONALIZATION

• Export business is international trade and international

trade is backed by several theories; however, emphasis
will be on:
– the stages theory of internationalization which holds that
entry into the international market follows a step-by-step
fashion, and
– the network theory of internationalization which suggests
that the best way of internationalization is by building
networks (links/relationships/associations) to facilitate
trade, instead of the sequential (step by step) entry proposed
by the stages’ theory.
 STAGES THEORY OF
INTERNATIONALIZATION
• The theory argues that for a firm to gain successive entry
into foreign markets, it ought to proceed in a consistent
step-wise fashion, along some organizational continuum
(chain)
• According to this theory,
–internationalization is seen as a slow and gradual process
–Close markets are explored before more distant
countries/markets are considered
–Through accumulated experiential knowledge, more
resources are committed to the foreign market
A TYPICAL INTERNATIONALIZATION PROCESS
Market Begins from the domestic market, entering first neighbouring and environmentally similar
markets. Positive experience from these markets encourages entry into new and environmentally
different markets
Goals No clearly defined goals at the beginning. Profit goals assume importance with experimental
success
Products A gradual increase in product types and variants, reflecting adaptation to requirements of
specific markets. Products may be subsequently standardized to fit regional and global market
requirements.

Entry Modes Responding initially to unsolicited and sporadic export orders, followed by indirect exports
through merchant companies, and then, direct exports to importers, ending with establishment of
sales subsidiaries and/or production units in selected markets.

Organization Start as occasional tasks of a single person in the firm, progressing to a full-time job of a
marketing officer, later, an export department may be established, perhaps with regional units,
an international division may be established at a later stage.

Management No marginal attention to start with. Commitment grows gradually with experience and success,
leading gradually to full commitment where home market receives only peripheral attention.

Knowledge None or ad hoc and inconsequential knowledge to start with, knowledge is acquired gradually
through experimenting, at a later stage active and systematic information collection and analysis
is undertaken.
 LIMITATIONS OF THE STAGES THEORY
• The impression that to achieve internationalization, a firm's forward progression is
inevitably progressive, consistently cumulative and irreversible is not always true.

• Furthermore, there is evidence of firms leap-frogging into later stages by strategic

moves conditioned by internal and external changes.

• Internationalization process will be slow if firms based their international decisions

largely on experiential learning

• The choice of entry strategies/modes does not always correspond to the sequential
step by step approach suggested by the stages’ theory

• There is the tendency of firms to take similarities between neighbouring countries

for granted.

• The idea of having a strong domestic market base before venturing into
international markets is not exactly applicable in most developing countries
 NETWORK THEORY
• A given market is seen as a network of relationships.
• Internationalization is therefore achieved by firms through
the development of business relationships with actors
abroad, thereby building a network position in the foreign
markets.
– An actor may be an individual, a department in a company, a
whole company or even a group of companies
– The roles and strengths of the actors are identified and thus,
provide an understanding of possible constraints and opportunities
for its operations
– Positioned within the foreign network, the internationalized firms
develop further relationships or linkages with other actors.
 NETWORK THEORY

• A basic assumption in the network approach is that;

– the individual firm is dependent on resources owned or
controlled by the actors.

• The exporting firm gains access to this important

resource(s) by developing and maintaining long-lasting
relationships to serve its economic objectives.
– The network brings together actors such as export distributors,
agents, foreign customers, consultants, public agencies,
customers, competitors, and other business partners
 ATTRIBUTES OF NETWORK THEORY
• The parties build mutual trust and confidence in each other’s
ability and willingness to fulfill their respective commitments.

• Mutual learning and knowledge concerning areas of

resources, marketing, organization and developing
possibilities also accrue.
– Reliance on complementary resources of partners

• Information flow is more comprehensive and reliable

• The parties adapt to each other’s needs and gradually become

interdependent because of the possession of high degree of
mutually beneficial assets.
 MERITS OF NETWORK THEORY
• Useful in gaining market-specific knowledge and valuable as a
source for market entry

• Firms that pursue opportunities in foreign markets enabled by

network resources experience greater international growth than
those that do not adopt this strategy

• Firms can gain access to the other firms’ experiential knowledge

without necessarily going through the same experiences

• Interpersonal and inter‐organizational relationships are viewed

as the media through which firms can gain access to a variety of
resources to gain competitive advantage
NETWORK THEORY
 DEMERITS OF THE NETWORK THEORY
• It does not consider the importance of the decision maker and
firm specific attributes in the network development.
– The neglect of inter-personal linkages, the decision maker and the firm
characteristics that emerge when firms take opportunities to penetrate, extend
and integrate in the international market through their networks. For instance,
managers of firms might not be interested in internationalizing over fear of
losing control over the enterprise or other personal grounds
• Secondly, it cannot determine how problems of
internationalization can be overcome by the firm through their
networks/relationships.

• Thirdly, the model does not take the formality of relationships

into account.
– For instance, neglecting several external factors such as
relationships with competitors, intense domestic competition and
unsolicited orders
 FOOD FOR THOUGHT
• Do you think it is better for firms to achieve
internationalization status through experential
learning or through business
networks/relationships?

• Do you think firms have to leverage both

experential knowledge and business
networks/relationships to successfully gain entry
and sustain their enterprise on the international
market?
 Trial Question

1. What is internationalization in export administration?

Critically examine the stages theory of
internationalization.

2. Comment on the view that, comparatively, the

Network theory is miles ahead of the Stages theory in
explaining the concept of internationalization
 PAHS 054:
EXPORT ADMINISTRATION

SESSION TWO:
COMPETITIVENESS OF GHANAIAN FIRMS I

LECTURER: EBENEZER ODAME DARKWAH

[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 Outline
• Introduction
• Definition of competitiveness
• Determinants of National Competitiveness
• Theory of competitive Advantage
– The Diamond of National Competitive Advantage
• Factor Conditions
• Demand Conditions
• Related Supporting Industries
• Firm Strategy, Structure and Rivalry
• Absolute, Comparative and Competitive Advantage
• Challenges to the Competitiveness of Ghanaian Firms
• Determinants of Competitiveness in the Industrial Sector
• How to Achieve Competitiveness of the Industrial Sector
 KEY QUESTIONS

• Can a nation’s natural endowments like land and labour

give it a competitive advantage over other nations in the
international market?
• What determines a nation’s competitiveness in the
international market?
• How can Ghanaian firms and industries increase their
competitiveness on the international market?
 INTRODUCTION

• Globalization has created competitions among nations ranging from

– social standards, −work ethics, −consumerism,
– clothing, −to the industry.
• Thus, to ensure gains in the international market, a country ought to attain
a competitive advantage in its key industries.

• It is also becoming clearer that national prosperity is created through

innovation and specialization but not inherited (natural resources, land,
labour etc.). (Using the developed and developing world dichotomy)

• It does not grow out of a country’s national endowments, its labour pool,
its interest rates or its currency value, government interventions or
management practices.

• It is therefore binding on nations to innovate to be competitive. However,

what determines a nation’s competitiveness?
 DEFINITION OF COMPETITIVENESS
• NB: A competitive nation is not a nation that can compete internationally
in all industries.

• Ideally, a nation can be competitive in one or two industries.

– Eg. Italy (Footwear), Switzerland (Pharmaceuticals), America (Aircraft), Japan
(Automobiles)
• Competitiveness is the ability of a nation to excel in a particular industry
than other such industries in other countries.

• Competitiveness simply means productivity in a well-defined and

coordinated area.

• D’Cruz (1992) refers to competitiveness as the ability of a firm to design,

produce and/or market products superior to those offered by competitors,
considering the price and non-price qualities.
 DETERMINANTS OF NATIONAL
COMPETITIVENESS
• The capacity of the country’s industries to innovate and
upgrade; (Scaling up)
• Strong domestic rivals – that exert pressure on firms to produce
quality goods
• Aggressive home-based suppliers.
• Demanding differences in culture, values, economic structures,
institutions and histories.
– National competitiveness does not happen as a result of;
• Cheap Labour ●Low interest rates
• management practices ●favourable exchange rate
• government interventions ●Abundance of natural resources
 THE THEORY OF COMPETITIVE
ADVANTAGE
• It was propounded by Michael Porter to help companies
create sustainable competitive advantage

• The focus is on individual industries, or clusters of

industries, and builds up to the economy, since firms, not
nations, compete in international markets.

• Though the home nation (which offers the economic

environment, institutions and policies) influences the
ability of its firms to succeed in particular industries, the
basic unit of analysis for understanding competition is the
industry
 THE THEORY OF COMPETITIVE
ADVANTAGE
• According to Porter, firms develop a competitive
advantage if domestic buyers are among the
world’s most sophisticated and demanding
buyers of the product.
• He further argues that the size of the home
market is only of secondary importance, and that,
large size is more valuable in the presence of
large research and development costs and large
uncertainty, as well as economies of scale in
production.
 THE THEORY OF COMPETITIVE ADVANTAGE

The theory is based on the system of determinants called ‘diamond.’ These

include
• Factor conditions such as labour, capital, land or raw materials (- a
specialized, sustained and heavy investments are the most important factors of
production. Example Denmark (insulin), Netherlands (Flowers)

• Demand conditions such as the features of the internal market - knowing

the needs of the locals (demand for high quality products of international
standards). Firms needs to constantly innovate and upgrade to be
competitive

• Related and supporting industries: Having competitive home-based

suppliers who also needs to innovate and upgrade to gain competitive advantage.

• Firm’s strategy, structure and rivalry (home-based): Firms with a

global strategy and strong local rivals or competition would innovate and
specialize to gain competitive advantage.
THE DIAMOND OF NATIONAL COMPETITIVE
ADVANTAGE

• Other equally important elements

– The role of government
– The role of chance
 CONCEPTS IN INTERNATIONAL TRADE

ABSOLUTE ADVANTAGE
• This is the advantage that one region is said to have over
another in the production of some commodity when an
equal quantity of resources can produce more of that
commodity in the first region than the second.
– Samuelson and Nordhaus (2009) define absolute advantage in
international trade as the ability of Country A to produce a
commodity more efficiently (i.e., with greater output per unit
of input) than Country B.
– It doesn’t suggest that country A can export his commodity to
B
 CONCEPTS IN INTERNATIONAL TRADE

COMPETITIVE ADVANTAGE
• Competitive advantage is whatever a firm does best to
give it an edge over its competitors.
• In this era of globalization, competitive advantage makes
a firm unique and puts it ahead of its competitors
• It is important to compete in an area in which a firm has a
lot of superiority than its competitors
 CONCEPTS IN INTERNATIONAL TRADE

COMPARATIVE ADVANTAGE

• It holds that each country should specialize in the production

and export of those goods that it can produce at relatively
lower costs. Conversely, each country should import those
goods which it produces at relatively high cost.

• Comparative advantage is also defined as the ability of one

nation (or region or individual) to produce a commodity at a
lesser opportunity cost in terms of other products foregone,
than another nation/country.

• Comparative advantage dictates trade patterns

 CHALLENGES TO THE COMPETITIVENESS
OF GHANAIAN FIRMS

• Packaging
• Cost of production
• Access to markets
• Taste
• Restrictions on the international market
• Language Barrier
 EFFORTS AT MAKING GHANAIAN FIRMS
COMPETITIVE IN THE ECOWAS SUB-REGION

• Organizing a Made-In-Ghana solo exhibition in Burkina

Faso as far back as August 2003.
• A close collaboration between the Association of Ghana
Industries with the Ministry of Trade and Industry and the
Ministry of Foreign Affairs to get clearance for passage.
• AGI’s export promotion drive for its member companies
in the area of health and wood products
 DETERMINANTS OF COMPETITIVENESS
IN THE INDUSTRIAL SECTOR
• Efficient use of the factors of production which
include the productivity of workers and the natural
resource endowment of the country

• Good government policies

• Conversion of domestic resources into goods and

services at prices that are either below or equal to
the world market price.
 HOW TO ACHIEVE COMPETITIVENESS
OF THE INDUSTRIAL SECTOR
• Introduction of measures which will increase
capacity utilization of firms to meet the
competition from imported products.

• Availability of adequate sources of finance at low

interest rates for industries

• Additionally, government should facilitate the

conduct of research and development by industry
and research institutions.
 TRIAL QUESTIONS

1. What is competitiveness? Examine the four determinants

of national competitiveness.
2. Write notes on the following concepts of international
trade.
a. Absolute Advantage
b. Comparative Advantage
c. Competitive Advantage
3. Discuss the challenges of competitiveness to Ghanaian
firms and how to achieve competitiveness in the
industrial sector.
4. Critically appreciate Porter’s Diamond of National
Competitive Advantage.
 PAHS 054:
EXPORT ADMINISTRATION

Session 3:
TRADE AND ECONOMIC DEVELOPMENT STRATEGIES

LECTURER: EBENEZER ODAME DARKWAH

[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 OUTLINE

• Introduction
• Import Substitution (Inward Orientation)
–Import Substitution Programmes
–Merits and Demerits of Import Substitution
• Export-led Growth (Outward Orientation)
–Merits and Demerits of Export-led Growth (Outward
Orientation)
 OUTLINE

Import Substitution
(Inward Export-led Growth
Orientation) (Outward
Orientation)

Import Substitution
Programmes
Merits and
Merits and Demerits of
Demerits of Import Export-led Growth
Substitution
 INTRODUCTION

• A country’s position on international trade is very key to

its economic development. That is, if the country should
be;
– Self-sufficient by replacing most imports with domestic
production, or
– strive to pay for the imports it needs by improving efficiency and
competitiveness, developing foreign markets, and giving
incentives for exports.

• There are two strategies that dominate in the area of trade

and economic development. These are;
– import substitution (inward orientation),
– export-led growth (outward orientation).
 IMPORT SUBSTITUTION

• It is a trade and economic policy based on the premise that a

developing country should attempt to substitute products which it
imports (mostly finished goods) with locally produced goods.
• In a broader sense, import substitution is the replacement of goods
and services purchased outside a region with goods and services
produced within the region.
• The policy most frequently used toward this end has been to build
high tariff walls around manufacturing industries so that local firms
can produce and sell goods that would otherwise be imported.
• This policy has often been popular in Latin America and other
developing countries. For example;
– Brazil imposed high tariffs on automobiles imported from North America or Japan into
Brazil in order to encourage firms to assemble automobiles at home than import them.
 IMPORT SUBSTITUTION PROGRAMMES

• Information Sharing and Networking

– This primarily is about connecting local producers with local suppliers. It
involves identifying imported inputs, searching for same inputs produced
locally, and linking suppliers and buyers through trade directories, exhibitions,
fairs etc.
• It saves cost for local businesses
• Increases flexibility of supply chains
• Engages local business
• Buy Local Programmes
– This programme encourages firms and consumers to purchase local products
rather than imports.
• The ‘Buy-made-in-Ghana’ campaign is an example.
• Industry Targeting
– This involves attracting firms and businesses that will engage in import
substitution.
 BENEFITS OF IMPORT SUBSTITUTION

• Import substitution, in the long run, could be a relatively

cost-effective strategy for economic development.

• It creates jobs and economic growth at a lower cost than

most economic development strategies.

• If properly managed, import substitution strategy can help

save foreign exchange needed for imports.
 DEMERITS OF IMPORT SUBSTITUTION

• Import substitution policies may protect and promote local

inefficient businesses, resulting in the production of sub-
standard goods.
• Import substitution may also draw accusations of
protectionism.
• Besides, local firms might not be challenged to innovate and be
competitive.
• The licensing schemes associated with Import Substitution
often promote rent-seeking (corrupt) behaviours.
• Import Substitution policies encourage inefficient industries
which create a drag on the economy.
 EXPORT-LED GROWTH STRATEGY

• This strategy presents itself as a better alternative to the Import

|Substitution strategy which encourages inefficient industries and
creates a drag on the economy.
• This is where exports become the centre of a country’s development
strategy. Outward orientation sets up a system of incentives that
stimulate exports.
– Ghana, for example, through the Economic Recovery Programme (ERP) introduced in
1983, shifted from import substitution (inward orientation) to export orientation
(outward orientation)
• Net exporting economies do better than net importing economies
– Ghana’s export promotion and development agenda is therefore one of the best avenues
for economic development
• The success of this strategy is best illustrated by East Asian NICs
(Taiwan, South Korea, Hong Kong and Singapore).
 KEY FEATURES OF EXPORT-LED GRWOTH
STRATEGY
• Maintaining a competitive foreign exchange rate
• Choosing foreign-trade policies that encourage
firms to produce for export,
• Minimizing unnecessary government regulation of
businesses, especially of small firms.
 BENEFITS OF EXPORT-LED GROWTH
STRATEGY
• Better allocation of resources
• Increased capacity utilisation
• Economies of scale (cost advantage in relation to output)
• Contributes to economic growth by lowering trade deficits
• Job creation
• Enhancing business opportunities
• Encourages technological development
• Better competitiveness and higher profitability
• The resulting diversification of markets also contribute to
the country’s economic stability
 DISADVANTAGES OF EXPORT-LED GROWTH
STRATEGY
• Limited Opportunity and Sustainability
– Exports are what economists call a zero-sum game. Every item that's
exported by one country has to be imported by another.
• Wage Suppression
– To sustain export-led growth, then, a country has to keep labor costs down
so that its exports remain competitive.
• Neglect of Domestic Priorities
– Countries seeking export-led growth, however, have production primarily
geared toward the needs of foreign consumers, not their own.
• Dependence on Foreign Markets
– A country may have a plan to produce a million cars for export, but that
plan can work only if people in other countries want to buy a million of its
cars
 COUNTRIES AND THEIR TRADE
STRATEGIES
Country Period Trade Strategy Growth Rate
Brazil 1955-60 Import substitution 6.9
Brazil 1960-65 Import substitution 4.2
Brazil 1965-70 Export-led 7.6
Brazil 1970-76 Export-led 10.6
Colombia 1955-60 Import substitution 4.6
Colombia 1960-65 Import substitution 1.9
Colombia 1970-76 Export-led 6.5
South Korea 1953-60 Import substitution 5.2
South Korea 1960-65 Export-led 6.5
South Korea 1970-76 Export-led 10.3
Tunisia 1960-70 Import substitution 4.6
Tunisia 1970-76 Export-led 9.4
 TRIAL QUESTIONS

1. Briefly explain the concept ‘Import Substitution’ as a

trade and economic policy and examine the strengths
and weaknesses of import substitution strategy?
2. What is Export-led growth strategy? What are its
characteristics and the relevance in the area of trade and
economic development?
 PAHS/ADMIN 054:
EXPORT ADMINISTRATION

SESSION 4:
NON-TRADITIONAL EXPORTS, PROCEDURES AND
DOCUMENTATION

LECTURER: EBENEZER ODAME DARKWAH

[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 OUTLINE

• What are Non-Traditional Exports?

• Categorization of NTEs
• Statistics and Facts on NTEs
• Export Incentive Schemes in Ghana
• General Export Procedures and Documentation
in Ghana
• Trial Questions
 INTRODUCTION
• Non-traditional exports have become the major engine of
growth for most developing countries since the
dependence on traditional exports such as cocoa, coffee
and gold is dwindling.
• The Ghana Export Promotion Council (GEPC) (now
Ghana Export Promotion Authority - GEPA) was
mandated to develop and promote the non-traditional
export sector.
• Non-traditional exports, as the term suggests, refer to all
other export commodities apart from the traditional
exports of cocoa, gold (minerals) and timber.
CATEGORIZATION OF NON-TRADITIONAL
EXPORTS
• The agriculture sub-sector comprises horticultural products,
vegetables, spices, cashew, coconut, rubber and rubber
products, tubers and marine products.
• The manufacturing sub-sector comprises of furniture and
other wood processing equipment, processed fruits and
vegetable products, salt, chocolate, beer and alcoholic
beverage, soap and detergent and essential oils.
• The handicraft sub-sector comprises traditional textiles,
straw products, ceramics & pottery, woodcrafts, jewelry,
art-work (fine art), painting & sculpture, cane products,
rattan and wicker.
 STATISTICS AND FACTS ON NTEs

• NTEs increased rapidly from US$ 124.00 million in 1993 to US$

700 million in 2004. The contribution of NTEs to GDP also
increased from 2% in 1993 to (8%) in 2004 (Adongo, 2002).

• The number of products and exporting firms has also increased

tremendously and there are now over 2,700 companies exporting
over 260 products (Opoku, 2002).

• As of 2017, Ghana exported NTEs to 130 countries around the

world (Ghana Business News, 2018).

• As of now, Ghana can boast of 383 NTEs.

Slide 5
 STATISTICS AND FACTS ON NTEs (cont’d)

• Ghana’s non-traditional exports sector has grown from 3.05 %

in 2013 amounting to US$2.436 billion as compared to 2012
which stood at US$2.364 billion (GPHA, 2018).

• Ghana’s non-traditional export earnings stood at US$2.514

billion in 2014, US$2.522 billion in 2015 but fell to 2.463
billion in 2016.

• The West African Sub-region and the European markets are the
leading markets for Ghana’s NTE products. Currently,
ECOWAS absorbs 37.25% of the products whereas the
European Union also absorbs 32.33% (Ghana Business News,
2018).
 ANNUAL NTE PERFORMANCE FROM
2007-2016
3000

2423… 2364.4 2522

2500 2436.2 2514 2463
Amount in US$ million

2000

1629.2
1500
1340.9
1164.5 1215
1000

500

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Years

Danso, 2018
 NTE EXPORT PERFORMANCE FOR 2015

Top 10 NTE sectors (green bars: USD million in 2016, squares: average annual growth ‘11/’15)
 NTE EXPORT PERFORMANCE FOR 2016

Top 10 NTE sectors (green bars: USD million in 2016, squares: average annual growth ‘12/’16)

Slide 9
 WHAT ACCOUNTS A DIP NTEs IN GHANA

• Poor quality post harvest infrastructure

• A decline in some processed cocoa products export

• Phytosanitary/health issues regarding groundnut paste, agushi

and maize meals such as banku mix which contains aflatoxin
leading to cancer as well as poor hygienic state of dried fish
(smoked/salted)

• Standardization issues

• Ban on vegetable exports to the European Union

 ENHANCING NTEs IN GHANA
• Provision of market information to the exporter community

• Delivery of market penetration assistance to exporters

• Initiation of product development programmes

• Capacity-building and training of exporters

• Development of national export strategy. This strategy has

come into existence with the launch of Ghana’s National
Export Strategy in 2013.
 ENHANCING NTEs IN GHANA (cont’d)

• Institution of a President’s National Awards for Export

Achievement in a bid to encourage companies operating in
the NTE sector.

• Obtaining international licenses to enable exporters to export

to bigger markets outside West Africa.

• Resolving phytosanitary/health issues pertaining to NTE

products

• Institution of proper standardization methods and procedures

 EXPORT INCENTIVE SCHEMES IN
GHANA
• Export incentive schemes are vital in motivating the
private sector to engage fully in export promotion
activities. It serves as a catalyst to increase the export
promotion drive among firms.

• The Ghana Export Promotion Authority (GEPA) in close

collaboration with the Ministry of Trade and Industry
played a crusading role in the establishment of incentive
schemes for exporters.

• There are five export incentive schemes in Ghana.

 EXAMPLES OF EXPORT INCENTIVE
SCHEMES IN GHANA
• An Export Proceeds Retention Scheme
–It allows exporters to exchange all (i.e.,100%) foreign
exchange proceeds from non-traditional exports into
cedis at competitive rates negotiated with the exporter's
bankers or keep them in their foreign exchange
accounts.

• A Corporate Tax Rebate/Refund

–It allows any manufacturer or any person, engaged in
agricultural production, exporting part or all of his
production, to claim a tax rebate between 40% and
75% of his tax liability.
 EXAMPLES OF EXPORT INCENTIVE
SCHEMES IN GHANA (cont’d)
• A Bonded warehousing for exporters
–BWE allows manufacturers to seek a Customs license to
hold imported raw materials intended for manufacturing
for export in secured places without payment of duty.
• Up-Front Duty Exemption Scheme
–UFDES enables exporters to enjoy 100% duty
exemption on imports intended to go into production for
export.
• A Custom Duty Drawback
–It allows exporters to draw back up to 100% of duties
paid on materials imported to produce goods for export.
 MEANING OF EXPORT PROCDURE

• Export procedure basically refers to the

execution of an order received from an
overseas buyer and includes everything that the
exporter is required to do right from the receipt
of a confirmed order up to the realization of
final payment.
 GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA
• Essence of Documentation
– Export marketing is different from selling at home
– Different currencies and organizations are involved in the
export business
– Correct documents are required and these may differ from
one country to another.
– Without correct documents an importer cannot obtain goods
when they arrive at the port.
– Although the exporter can employ an agent to handle
documentation instead of handling it himself, he should
know something about it because it plays such an extensive
role in export procedures.
GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA
• Purpose of Documentation
–To provide complete description of goods so that
they can be correctly assessed for duty
–Documentation is also used in transport
arrangements, payment and insurance claims.
 GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA
• The main documentation for export shipment involves the
following
– Export License
It is normally required for the export of raw materials,
goods in short supply, antiques, etc., or other goods
related to national security. In Ghana, an export license
is used for the export of traditional products
– Customs Entry Form
It is used for compiling statistics on the volume and
value of exports. In Ghana, this document is the Ghana
Export Form.
GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA (cont’d)
–Commercial Invoice
It gives information on the basis of which duty will be
assessed. It is usually prepared on the exporter’s own
letterhead but the contents must comply with the
regulations of the importing country. Quantities must be
set out clearly, cost of goods shown separately from the
cost of transport and insurance.

–Customs Invoice
It is a special form prescribed by customs authorities.
GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA (cont’d)
–Consular Invoice
It gives a detailed description of the goods, the number value
of the goods, their origin, and a declaration about the accuracy
of the contents. It is often written in the language of the
importing country. (Needed in most Arab and Latin American
countries)

–Certificate of Origin
It is to establish in the importing country the right of the
product to preferential duties to which it may be entitled. In
Ghana, we use the EUR 1 form for most European Countries
and the Generalized System of Preference form for the USA.
These are issued by the Chamber of Commerce and validated
by CEPS
GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA
–Certificate of Value
It shows the true and full statement of the price paid for goods
and that there is no other understanding between exporter and
importer.
–Certificate of health/sanitary certificate
It is required when animals, plants, and their by-products are
exported. The certificate confirms that the goods are free from
disease or pests. In Ghana, these documents are issued by SGS
Standard Board, Plant Quarantine and Game and Wildlife
Department depending on the product being exported

–Certificate of Inspection
It ensures that the goods meet a certain standard. This is
usually issued by the Ghana Standards Authority (GSA).
GENERAL EXPORT PROCEDURES AND
DOCUMENTATION IN GHANA (cont’d)
– Packaging List
It supplements the commercial invoice and shows the contents of a
consignment when numerous units of the same product are being
shipped. It must be on the exporting company’s letterhead.
–Certificate of Insurance
It provides evidence that the consignment has been insured against
loss or damage during transportation.
–Bill of Lading or Airway Bill
It serves as a contract between the exporter and shipping line and
covers the carriage of the goods from the port of loading to the
port of discharge. The B/L is also a document of title to the goods
sent to the importer to enable the goods to be cleared.
 IMPORTANCE OF DOCUMENTATION
TO THE EXPORTER
• Commercial Invoice is very important to the exporter
for the following reasons:
– It enables the exporter to collect payment from the importer.
– A copy of the commercial invoice is required to be submitted to
the Ghana Exports Promotion Authority.
– A copy of the commercial invoice is required to submit to
customs for customs clearance at the port of shipment.
– It can act as documentary proof or evidence in case of disputes
between the exporter and importer regarding the amount
payable by the importer.
– Commercial invoice helps the exporter on his agent to prepare
other documents based on the commercial invoice, such as
shipping bill.
– A copy of the commercial invoice is required by the exporter to
claim incentives.
 IMPORTANCE OF DOCUMENTATION
TO THE EXPORTER (cont’d)
Consular Invoice is important to the Ghanaian Exporter
for a number of reasons:
• It facilitates easy clearance of goods from customs.
• When the invoice is signed by the consulate of the
importing country, it is an assurance to the exporter this
his goods will enter the buyer’s country without any
difficulty.
• The interest of the exporter is well protected. He can
realize foreign exchange against shipment without a
problem.
 IMPORTANCE OF DOCUMENTATION
TO THE EXPORTER (cont’d)
The Bill of Lading is very important to an exporter because of
the following:
• Bill of lading is a legal document. In the event of a dispute, it
can be presented in a court of law.
• It is a contract of transportation.
• It is an acknowledgement of the receipt of the goods on board
the ship.
• It enables the exporter to send shipment advice to the buyer.
• It helps the exporter to file a claim of compensation if goods
are damaged in transit.
• It helps the exporter to calculate the exact amount of freight
to be paid.
 EXPORT PROCEDURES IN GHANA
1. Formation and registration of a company at the Registrar
Generals Department.
2. Registration of the company with the Ghana Export
Promotion Authority as an exporter
3. Opening of company bank account
4. Securing an export order through quotation/acceptance of a
quotation, transportation, terms of delivery, insurance and
terms of payment.
5. Signing of a formal contract
6. Preparation of the goods for export according to
specifications both importer and exporter have agreed on.
 OTHER REQUIREMENTS THAT
EXPORTERS MUST MEET
• Exports and imports in Ghana are controlled by the Exports and
Imports Act, Act 503, 1995.
• Exporters of traditional commodities must complete the Exchange
Control A2 Form, endorsed by the exporter's bankers and
presented to the Customs Examination Officer at the time of
shipment.
• Exporters of non-traditional products must complete a Ghana
Export Form (from the Banks or port of exit) and present it to
Customs at the time of export.

• Exports of antiques, wildlife, live plants, and pets require permits

from Ghana Museums and Monuments Board, the Department of
Game and Wildlife and the Plant Protection and Regulatory
Service of the Ministry of Food and Agriculture respectively.
 TRIAL QUESTIONS

• What are non-traditional exports? Examine the

conditions inhibiting the growth of non-traditional
export products in Ghana and advance possible
solutions to remedy it.
• Outline the procedures an exporter must go
through to ship his goods overseas and discuss
some of the export incentive schemes instituted by
Ghanaian governments.
• Discuss the importance of any two important
documents to the Ghanaian Exporter.
 PAHS/ADMIN 054:
EXPORT ADMINISTRATION

LECTURE FIVE:
INSTITUTIONAL SETTING OF EXPORTS

LECTURERS: EBENEZER ODAME DARKWAH

[email protected]

College of Education
School of Continuing and Distance Education
2023/2024
 OUTLINE

• Background to Institutional setting of Exports

in Ghana

• Export institutions and agencies in Ghana and

what they do
 OUTLINE

Background to Export institutions and

Institutional setting of agencies in Ghana and
Exports in Ghana what they do
 INTRODUCTION
There are various institutions and agencies which support
export in Ghana. These institutions provide regulatory,
promotional or facilitatory roles.
These include:
• Ghana Export Promotion Authority (GEPA)
• Ghana Free Zones Authority (GFZA)
• Ministry of Trade and Industry (MOTI)
• Ghana Trade Fair Authority (GTFA)
• Ghana Standards Authority (GSA)
• Export Development Agricultural and Investment Fund
(EDAIF).
BACKGROUND OF THE INSTITUTIONAL FRAMEWORK FOR
EXPORT PROMOTION IN GHANA

• Export promotion gained roots during Economic Recovery

Programme (ERP) in the early 1980s which included
policies.
• The Private Enterprise and Export Development (PEED)
with a $41m credit line was implemented in 1994 with the
aim of promoting non-traditional goods.

• Under this programme, the private sector became the focus

in the drive to promote non-traditional exports (NTEs).
Credits were given to Small and Medium Scale Enterprises
(SMEs) for export facilitation and promotion.
BACKGROUND OF THE INSTITUTIONAL FRAMEWORK FOR
EXPORT PROMOTION IN GHANA

• A Trade and Investment Programme (TIP) was introduced. This

is a five-year Trade and Investment Reform Programme
(TIRP), designed to enhance Ghana's potential to earn critically
needed foreign exchange and to compete more effectively in
the global marketplace.

• In 1995, the Ghana Free Zones Board (GFZB) was established

to promote the processing of raw local and imported materials
and goods for export.

• Currently, there are over 15 agencies tasked with promoting,

regulating and structuring the Ghanaian export sector.
 EXPORT INSTITUTIONS/AGENTS IN
GHANA
• Ministry of Trade and Industry (MOTI)
• Ghana Export Promotion Council (GEPC) – Now, Ghana
Export Promotion Authority (GEPA)
• Federation of Association of Ghanaian Exporters (FAGE)
• Ghana National Procurement Agency Limited
• Association of Ghana Industries (AGI)
• Ghana National Chamber of Commerce and Industry
• Private Enterprise Foundation (PEF)
• Timber Export Development Board
• Ghana Cocoa Board
EXPORT INSTITUTIONS/AGENTS IN GHANA
(cont’d)
• Ghana Trade Fair Company Limited
• The Minerals Commission
• Bank of Ghana
• Commercial Banks
• Ghana Shippers’ Council
• Insurance Companies
• Customs, Excise and Preventive Services
• Clearing and Forwarding Agents
• Precious Minerals Marketing Company Limited
• Some NGOs
 ROLE OF THE MINISTRY OF TRADE
AND INDUSTRY (MOTI)
• Responsible for the formulation, implementation and
monitoring of Ghana's internal and external trade.
• Ensure that Ghana derives maximum benefit from internal
trade relations and that domestic trade is conducted in a
smooth and orderly manner.
• Strengthen trade relations with all friendly countries on a most
favoured national basis consistent with her membership of the
World Trade Organization (WTO).
• Introduced Ghana Trade and Investment Gateway Programme,
which seeks to promote foreign direct investment (FDI) and to
establish Ghana as a major manufacturing, value-added,
financial and commercial centre in West Africa.
 THE VISION AND MISSION OF THE
MOTI
• The primary vision of the Ministry of Trade and Industry
is to develop a vibrant technology-driven competitive
industrial sector through
– Policy formulation
– Facilitating enterprise development including MSEs
– Development and enforcement of standards in trade and industry
– Promoting and facilitating Ghana's internal and export trade with
emphasis on diversification and value-addition
– Promoting and facilitating Ghana's active participation in Global
Trade through participation in multilateral and Pluri-lateral
Institutions as well as championing Ghana's market expansion
drive.
THE VISION AND MISSION OF THE MOTI
(cont’d)
• It is also the vision of the ministry to develop an
industrial sector which will lead to the diversification and
structural transformation of the economy in a liberalized
trade environment.

• The mission of the ministry is to provide assistance to the

private sector, commercial and industrial activities to
support the development of a modern, robust
manufacturing sector driven by science and technology
on a competitive basis.
 POLICIES OF THE MOTI

• The ministry has two major policies: trade sector policies

and industrial sector policies.

• Trade policies include:

– Creation of a buoyant and self-sustaining export sector;
– Expansion of domestic trade thereby ensuring the countrywide
availability of goods at reasonable prices
– Pursuit of efficient and effective import management practices;
– Adoption of anti-monopoly legislation and other regulations to
protect the consumer
 POLICIES OF THE MOTI
– Pursuit of anti-dumping policies in international trade through
rationalization of all tariffs and the identification of all non-tariff
barriers to trade
– Active and effective participation in multilateral trade to secure
increased market access for Ghana's export especially processed
and semi-processed goods and to achieve stable, fair and
remunerative prices for commodities of export interest to Ghana.

• The thrust of the industrial sector policy is the promotion

of accelerated and sustainable industrial development
within a liberalized and global economic development.
 EXISTENCE AND MISSION OF THE
GHANA FREE ZONES AUTHORITY
• The Free Zones Act, Act 504, which brought into
existence the Free Zones Authority was promulgated
August 31, 1995, to enable the establishment of free zones
in Ghana for the promotion of economic development, to
provide for the regulation of activities in free zones and
for related purposes.

• Its mission is to transform Ghana into the Gateway of

West Africa by creating an attractive and conducive
business environment through the provision of
competitive free zone incentives and the operation of an
efficient “one-stop-shop” for the promotion and
enhancement of domestic and foreign investment.
 VISION OF THE GHANA FREE ZONES
AUTHORITY
• To facilitate a vibrant economy in Ghana, driven
by a well integrated business environment with
world class capacity for competition,
technological innovation, business growth,
economic diversity and development.
 SERVICES PROVIDED BY THE GHANA
FREE ZONES AUTHORITY
• Providing information on investment opportunities in the
free zone
• Issuing licenses to approved free zone enterprises
• Assisting in securing other permits from related agencies
• Providing ready facilities that are serviced land and
utilities at the export processing zones
• Obtaining work/residence for expatriates in the free zone
• Providing any other services requested by investors
 THE GHANA FREE ZONES PROGRAMME

• A Free Zones Programme was promulgated to further

augment the economic liberalization programme by the
government which seeks to provide special facilities and
investment incentives to encourage the production of
goods and services primarily destined for the export
market, through the attraction and utilization of foreign
direct investment and increasing the role of the private
sector.
 THE GHANA FREE ZONES PROGRAMME

• The programme set the stage to jump-start Ghana’s

economy with the fundamental objective of creating
employment opportunities, encouraging local processing
of and value addition to manufactured products,
increasing foreign exchange earnings, enhancement of
technical and managerial expertise and promoting the
transfer of technology.

• It is purposely designed to promote the processing and

manufacturing of goods through the establishment of
Export Processing Zones (EPZs).
 SOME FREE ZONES INCENTIVES IN
GHANA
• 100% exemption from payment of direct and indirect
duties and levies on all imports for production and exports
from free zones
• 100% exemption from payment of income tax on profits
for 10 years and not exceeding 8% thereafter
• Total exemption from payment of withholding taxes from
dividends arising out of free zone investments
• Relief from double taxation for foreign investors and
employees
• No import licensing requirements
SOME FREE ZONES INCENTIVES IN GHANA
(cont’d)
• Minimal customs formalities
• 100% ownership of shares by an investor-foreign or
national-in free zone enterprise is allowed
• Free zone investors are permitted to operate foreign
currency accounts with banks in Ghana
• Up to 30% of the annual production of goods and
services of a free zone enterprise are authorized for sale
on the local market
• Free zone investments are guaranteed against
nationalization and expropriation.
 IMPACT OF THE FREE ZONES
PROGRAMME
POSITIVE:
• Employment creation is perhaps the most significant and
immediate contribution that the free zones programme
has made to the country’s economy.
• Increased foreign exchange earnings and export
diversification are also significant.
NEGATIVE:
• Bureaucratic bottlenecks
• Lack of commercial and financial infrastructure
• Lack of adequate research on NTE development.
 ENHANCING THE FREE ZONES
PROGRAMME
• It is necessary to remove basic constraints of
bureaucratic principles with regard to the movement of
persons and goods at entry points by simplifying
immigration, customs and excise procedures.

• There is also the need to improve the commercial and

financial infrastructure and regulations to support the
development of local banking, insurance and related
financial services.