Ghana has a very vibrant consumer and industrial products and services sector. According to the African Development Bank (AfDB), Ghana’s industrial sector was a major driver of growth of the economy from 2017 to 2019, with an average annual growth of the industry sector exceeding 10%. The AfDB further noted that with the African Continental Free Trade Agreement, Ghana’s industry will absorb increasing raw materials from the region, scale up manufacturing, and trade in processed and light manufactured products.
Manufacturing has the ability to revolutionize Ghana’s economy by broadening the country’s production and export base while also increasing employment, income, and export revenues. Cocoa processing, food and agro-processing, textiles and garments, and medicines are some of the industries that might promote manufacturing in Ghana. Emerging and ongoing initiatives that may have a significant impact on the manufacturing sector include the development of value chains for some local raw materials, the impending implementation of GCAP to ensure that goods imported into Ghana meet certain standards, and the elimination of minimum capital requirements for foreign investors entering the manufacturing sector.
Ghana competes in the global economy primarily using natural resources. Other than the usual exports of cocoa, gold, lumber, and crude oil, Ghana has a competitive advantage in numerous product categories. However, it would be pointless to invest in any product category if it could not considerably increase earnings. As a result, suggested items should have a higher income content and be more complex than those now exported. Increasing the proportion of high-income commodities in the export basket hastens economic transition. The opportunity is providing better, economically advantageous items to regional and worldwide markets. Cocoa processing, wood processing, aluminum products, palm oil, food and agro-processing, and fish processing are examples of manufacturing sub-sectors that fit these two requirements.
Manufacturing subsectors that capture considerable proportions of manufacturing value-added, such as food and drinks, chemicals, and textiles, have significant technology, knowledge, and skills inherent in them. These assets can be used to produce additional goods within the sub-sector or even outside of it. It is also easier to go up the value chain after you have mastered relevant technologies and markets. The “One District, One Factory” Initiative is a crucial component of the Ghanaian Government’s Industrial Transformation Agenda. The Ministry of Trade, Industry, and Presidential Special Initiatives pioneered the concept as part of an integrated program for Accelerated Growth and Industrial Development. Initially known as the Rural Enterprises Development Programme, it was eventually renamed the District Industrialisation Programme (DIP). It was intended to be a comprehensive rural industrialization initiative including the establishment of at least one medium to large scale industry in each of Ghana’s administrative districts. The project aspires to do this through a huge private-sector-led statewide industrialization effort that will equip and empower communities to use their natural resources to manufacture items that are in great demand both locally and globally. This would enable the country to realize the benefits of modernization by increasing agricultural and manufacturing output, decreasing dependency on imports, and increasing food availability.
Until recently, the sector was characterized by a narrow industrial base dominated by agro-industries, limited diversification, reliance on imported inputs of raw materials and intermediates, relatively under-developed industry linkages, the prevalent use of obsolete technologies, and production that is mainly focused on the domestic market.
Government recognizes that significant transformation of the sector is vital. As such, a change process is being promoted and stimulated to make the sector exhibit a diversified structure of production; undertake the processing of more of Ghana’s natural resources to be export-oriented. Ghana’s most important manufacturing industries include aluminum smelting, oil refining, chemicals and cement, processing of metals, pharmaceutical manufacturing, wood processing, as well as textile and garment manufacturing. The Government proposes an Automotive Manufacturing Support Centre to train and develop the skills and vehicle financing support to sector players and set up the Automotive Industry Development Council.
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