Earlier this month, the UK and Ghana announced the signing of a long-anticipated bilateral economic partnership agreement (EPA) aiming to replicate pre-Brexit trading arrangements and provide for the two countries’ respective long-term economic ambitions.
To quote UK authorities, the deal means that: “Ghanaian products including bananas, tinned tuna and cocoa will benefit from tariff-free access to the United Kingdom. UK exports are also in line to benefit from tariff liberalisation from 2023, including machinery, electronics and chemical products.”
Regulatory clarity is the agreement’s most immediate benefit. And one not to be sniffed at. Of Africa’s 54 countries, Ghana is the region’s ninth-largest economy and the UK’s ninth-largest trading partner (at least in terms of merchandise trade). Ghanaian-British bilateral trade flows in 2019 were valued at £1.2bn, according to figures provided by the British government. The £204m stock of UK foreign direct investment (FDI) in Ghana and £1m stock of Ghanaian FDI in the UK are additional pillars of the relationship.
Looking forward, however, there are reasons to believe that the potential for the relationship is larger than the status quo. At 7.1% and 4.1% year-on-year, Ghana’s average annual GDP and real per capita GDP growth was the third-fastest in the entire region between 2009 and 2018 – behind Ethiopia and Rwanda. Recently discovered oil and gas resources are an important part of that story (production began in December 2010).