The New Ghana-UK Trade Partnership Agreement

The British government released an official statement on 4th February 2021, which states that the UK and Ghana have finally struck a trade deal. The Department of International Trade also added that the new trade relationship conditions are going to be similar to those existing before Brexit went into effect (31st December 2020).

The two countries have not signed the official agreement yet, but they had reached a consensus about the new deal’s conditions. The negotiations are finally over, and the Ghana-UK Trade Partnership Agreement will enter into effect once both countries complete the necessary internal procedures and documentation.

What Does the New Agreement Entail

Although the precise contents of the new Agreement are not yet known, the governments of Ghana and the UK included the highlights of the document in their statements.

Ghana will be given a duty free and quota free access to the British market, while UK exporters will benefit from preferential traffic reductions to the Ghanaian market. It appears that the two countries are equally happy about this trade deal as its mutual benefits are apparent.

The Agreement and the Economic Community of West African States

Ghana and the UK also shared their desire for development cooperation and commitment to human rights. Moreover, the British Department of International Trade adds that the long-waited Agreement further highlights ‘the importance of integration between the West African States within the context of the Economic Community of West African States (ECOWAS) and amongst African States within the context of the African Continental Free Trade Area. The Agreement further underscores their shared ambition to enhance relations between the UK, ECOWAS and African States more broadly.’

The Economic Community of West African States constitutes of fifteen member countries, located in West Africa, with mutual economic interest, as well as lasting cultural and historical ties. It was revealed on 4th February 2021 that Ghanaian president Nana Addo Dankwa Akufo-Addo would serve a second one-year term as a Chair of the ECOWAS Authority. Akufo-Addo would oversee the implementations of the reforms in the organization.

What’s the Price Tag of the New Agreement

The International Trade Secretary Liz Truss announced that the trade deal between Britain and Ghana measures £1.2 billion (approximately $1.65 billion). The Ghana-UK Agreement is part of Boris Johnson’s cabinet effort to secure as many trade deals as possible for UK’s post-EU situation.

Liz Truss’ department has been rather successful in this job as it signed more than 60 trade deals over the period of 18 months, which sets a new record for a British cabinet. Together, these trade deals amount to approximately £885 billion ($1.2 trillion).

Challenges Faced by Ghana in the Midst of Brexit’s Official Implementation

Despite the record-setting achievements of the British Department of International Trade, the consensus reached between Ghana and the UK didn’t come without its problems. In the wake of Brexit, or the first few days of the new year, shipments coming from continental Europe and other countries were stuck at the British border.

While the UK signed its ‘divorce papers’ with the EU shortly before Brexit became fact and thus import and export between the two could commence, other countries such as Ghana weren’t that lucky. Although consensus between Ghana and the UK was already reached in December 2020, the actual text wasn’t finalized until weeks later.

This precarious situation proved to be costly to Ghanaian companies, which sought to import their products in the first few days of Brexit’s implementation. For instance, Golden Exotics – a banana producer set in Accra, Ghana – had to pay tariffs amounting to more than £17,500 ($24,000). The company is one of the few employers in the region, which offers work to 3,000 employees. George Kporye, Golden Exotics’ administration manager, believes that the tariffs should be waived considering that the two countries have already agreed on the terms of the Agreement. He also adds that Ghana and the UK should do everything to speed up the legal process and sign the Trade Partnership Agreement, while his company is reducing the amount of produce due to the uncertain situation amidst Brexit.

Kporye is one of the many affected by Brexit and the lack of official agreement between his country and the UK. However, this surprised many economists who expected Britain to prioritize countries from the Commonwealth such as Ghana in its trade relations. After all, countries from the Commonwealth would be key trade allies to Britain, which already faces snubs from the EU. Nevertheless, the produce Ghana can offer such as oil, fish, cocoa and fruit is vital for British supermarkets, and amounts to £498 million ($682 million), while the UK’s exports to Ghana generate £722 million ($988 million).