Promotion of non-traditional exports under the structural adjustment programme in Ghana

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1998-02-22
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The research is concerned with the effect of current government policies under the ERP on NTE5. Studies on the performance of NTEs before the EU have shown that NTE policies before the ERP did not achieve any significant result. This has brought forth the question of whether the current NTE policies have the impetus of improving NTE performance. The imperical research therefore examines the current NTE policies under the UP to find out the effectiveness of using the policies to influence the performance of NTEs as a basis of export development and diversification. A study conducted to examine the effect of NTE policy change sampled 156 firms (both exporters and non-exporters) from a population of 300 firms selected from three metropoles (Accra/Tema, Kumasi and Shama-Ahanta). Thirteen major NTEs used for the analysis were selected from three product-group (Agricultural, Processed and Semi-Processed and Handicraft). The selection of these products was based the following criteria. a) overall contribution of the product to export earnings of the non-traditional sector; b) the degree of value added and the linkage with other sectors; and c) the availability of ready external market. Data for the analysis were dollected from both secondary and primary sources. Prominent secondary data sources are; Ghana Export Promotion Council annual reports? Quarterly digest of statistics (various issues) and Economic survey. Primary data were collected with the help of structured questionnaires. The analysis of the study revealed that exchange rate and trade policies were the most dominant variables which influenced the performance of NTE under the REP period. Also revealed were some challenges facing NTE sector. Among them were export finance which many exporters considered as a major challenge, and bureaucratic export procedure which makes exporting burdensome Based on these findings, the study recommends the following as a. solution to the development of nontraditional exports. a) the need to maintain appropriate macro-economic, exchange rate and trade policies are imperative for the sustained development of NTEs. b) the need to improve the capital base of Export Finance Company to be more resourceful to expand credit facilities to many exporters. c) the need to establish export processing centre to reduce the bureaucratic export procedure. The study concludes that even though there were some challenges which faced NTE sector, NTEs performance have responded positively to the policies under the ERP as compared with NTE policies before the ERP. In terms of relative prices, ERP/SAP policies especially the exchange rate depreciations have improved export earnings relative to those of domestic goods.
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A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of the Degree of Master of Science in Development Policy and Planning, 1998
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