Export diversification critical to reducing trade deficit

goldAn Advisor to the Governor of the Central Bank, Franklin Belnye has emphasised that diversification of the country’s export sector is critical to addressing Ghana’s trade deficit with the developed economies.

“We need to move away from the reliance on the traditional export products  such as gold, cocoa, timber and oil, and promote  Non-Traditional Export (NTE) products  to reduce the country trade deficit,” he said in interview with the Times Business after the  opening of the Ghana International Bank (GHIB)  training on International Trade Finance programme in Accra on Monday.

The four-day programme being attended by more than 40 participants from the banking, commodity and the ports and harbour sectors, was to build their capacity on international trade finance and introduce them to new dynamics in the industry.

Mr. Belnye, who is also a director at GHIB, said in view of the volatility in the prices of commodities such as oil on the international market, the country could not rely on its traditional export products.

For instance, he said, Nigeria which used to be Africa’s largest economy, was currently reeling under economic difficulties due to the plummeting of oil prices, the country major export,   on the international market.

Mr. Belnye stressed the need for the country to identify and develop new NTE crops such as rice, pepper, and maize, which were in high demand on the international market, to raise more foreign exchange.

He lauded the government for the establishment of the Ghana Exim Bank to support the export sector, and disclosed that the Bank of Ghana was also spearheading a fund, which would be contributed by the universal banks, to support the export sector.

Commenting on the training, the Advisor to the Central Bank Governor lauded the GHIB for the training for players especially in the banking sector.

“Banks play a key role in international trade by providing finance which is vital to this process.  To do this effectively, banks have to understand the customs and practices involved,” he said.

The Chief Executive and Managing Director of GHIB, Joe Mensah said GHIB understood the needs of people and businesses in Africa, and wanted to share the bank’s experience with the banking and business community in Africa.

“The bank’s exposure in the region has been growing rapidly.  The growth in GHIB’s African operation is reflected in the surge in both the bank’s balance sheet that has more than doubled in the past seven years and its pre-tax profits which has increased some fivefold during the same period,” he said.

Mar Arthur, the Executive Director of GHIB said his outfit was excited about the programme, saying “we will cover the full range of trade finance products, recent issues in international trade finance, risk assessment, money laundering and fraud as well as practical problem solving”.

He said the diversity of the experience of this year’s delegates would help enrich the conversations at the programme.

 

By Kingsley Asare

 

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