Ghana’s economic trajectory remains strong, with continued efforts toward industrial expansion, trade diversification, and digital transformation.
The Mahama administration enters office at a pivotal time when Ghana is poised to capitalize on global economic shifts, leverage strategic partnerships with China, and deepen its engagement in the African Continental Free Trade Area (AfCFTA).
The previous administration laid a strong foundation, securing debt relief, strengthening macroeconomic stability, and advancing key infrastructure projects. Ghana’s progress under the IMF-supported Extended Credit Facility (ECF) has led to macroeconomic improvements, providing a better fiscal space for strategic investments.
With China’s evolving commitments under FOCAC 9, Ghana now has the opportunity to expand its economy through Public-Private Partnerships (PPP), skills development, and industrial investments.
Addressing the Ghana-China Trade Imbalance
A major challenge in Ghana-China economic relations has been the persistent trade imbalance. Ghana’s exports to China—mainly raw materials such as crude oil, cocoa, and gold—remain significantly lower than its imports from China, which consist of manufactured goods, machinery, electronics, and textiles.
Key Trade Data
In 2023, Ghana’s exports to China were valued at approximately $3.8 billion, while imports from China reached $8 billion.
This created a trade deficit of over $4 billion, meaning Ghana buys far more from China than it sells.
Proposed Solutions to Balance Trade
1. Increase Value-Added Exports to China:
Ghana must move away from exporting raw materials and focus on processed and semi-processed goods such as:
– Processed cocoa products (e.g., chocolate, cocoa butter)
– Refined gold and jewelry
– Manufactured timber products
China’s Green Lanes Initiative, launched during FOCAC 8, offers duty-free access for African agricultural exports. Ghana should negotiate expanded access for value-added goods rather than just raw materials.
2. Leverage AfCFTA to Develop Regional Supply Chains:
– Ghana should position itself as a key manufacturing hub in West Africa under AfCFTA.
– Ghana-based Chinese factories should be encouraged to source raw materials locally instead of importing from China.
This would create jobs and reduce import dependency.
3. Encourage More Chinese FDI in Ghana’s Industrial Sector:
– Chinese firms should be incentivized to produce goods in Ghana, rather than export finished products from China.
– Joint ventures with Chinese manufacturers can help establish local factories, reducing imports.
Sectors for priority investment:
– Automobile assembly and spare parts production
– Pharmaceutical manufacturing
– Textile and garment industry
4. Target Chinese Companies for Agro-Processing Investment:
– China’s growing middle class presents an opportunity for Ghana’s processed foods.
– Ghana should attract Chinese agribusinesses to invest in local processing plants for export-oriented industries like cashews, palm oil, and fresh fruit juices.
This will increase agricultural exports and reduce the trade imbalance.
5. Trade Negotiations: Reducing Tariffs and Non-Tariff Barriers:
– Ghana should engage in high-level discussions with Chinese trade officials to:
– Reduce import tariffs on Ghanaian goods.
Address non-tariff barriers such as sanitary and phytosanitary measures that limit Ghanaian agricultural exports.
Simplify export procedures to increase the competitiveness of Ghanaian businesses in the Chinese market.
This will enhance market access for Ghanaian products and improve trade relations.
6. Bilateral Agreement on Trade Rebalancing Measures
Ghana should negotiate a bilateral framework with China focused on:
– Increasing Ghanaian exports to China
– Encouraging Chinese industries to manufacture in Ghana
Facilitating Ghanaian companies’ access to China’s e-commerce platforms like JD.com and Alibaba.
If properly implemented, these measures could reduce Ghana’s trade deficit with China by at least 30% within the next five years.
Economic Expansion and Strategic Partnerships
Ghana’s GDP is projected to grow at 5.6% in 2025, driven by:
– Increased industrial production
– Expansion of regional trade through AfCFTA
– Sustained foreign direct investment (FDI)
1. Industrialization and Manufacturing Expansion
Ghana’s industrial sector remains a key driver of economic transformation. Strategic partnerships with China’s leading corporations will enhance local production capacity, technology transfer, and export diversification.
Electric Vehicle (EV) Manufacturing
Ghana’s lithium reserves, valued at over $10 billion, present a major advantage in the EV supply chain.
A PPP approach will allow Ghana to partner with China’s BYD Auto and CATL to establish battery manufacturing and EV assembly plants.
Estimated investment: $1.5 billion over five years.
Projected job creation: 10,000 direct and indirect jobs.
Heavy Industry and Manufacturing
Ghana’s existing Tema Steel Works Ltd. could be expanded through a joint venture with Baowu Steel Group.
Expected investment: $800 million
Job creation: 6,000 jobs in steel production and downstream industries
2. Infrastructure Development through PPPs
Ghana should prioritize equity-based partnerships over debt financing for infrastructure projects.
Key Focus Areas:
– Expansion of Tema and Takoradi Ports
– Railway infrastructure linking mining regions to export hubs
– Urban transportation systems in Accra and Kumasi
– Renewable energy projects
Projected Economic Impact:
– $5 billion in infrastructure investments by 2027
– 50,000 jobs created in construction and logistics
3. Digital Economy and AI
– Huawei: Expansion of 5G infrastructure.
– JD.com & Alipay: Digital payment integration for Ghana’s fintech sector.
– DeepSeek AI: Collaboration on AI-driven industrial automation.
Projected Economic Impact:
– $500 million investment in digital infrastructure by 2027
– 20,000 jobs in tech and digital services
4. Strengthening Bilateral Coordination:
– Establish a China Desk at the Presidency for strategic oversight of Ghana-China engagements.
– Organize a high-level trade delegation to China to secure industrial and export agreements.
Strategic Path Forward
Ghana’s economic engagement with China must be strategic, balanced, and focused on long-term benefits.
Key Priorities:
– Public-Private Partnerships for industrial expansion.
– Skills transfer and job creation through local manufacturing.
– Trade diversification under AfCFTA to balance Ghana-China trade.
– Renewable energy investments to support industrialization.
– Bilateral trade rebalancing framework to close the deficit gap.
If executed effectively, Ghana can reduce its trade imbalance with China, expand its industrial base, and establish itself as a leading economic hub in West Africa.