VZCZCXYZ0002
PP RUEHWEB

DE RUEHAR #1449/01 3190942
ZNR UUUUU ZZH
P 140942Z NOV 08
FM AMEMBASSY ACCRA
TO SECSTATE WASHDC PRIORITY 7237

UNCLAS ACCRA 001449 
 
SIPDIS 
 
STATE FOR EB/TPP/BTA; STATE PASS TO USTR-GBLUE 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EFIN GH
SUBJECT:  GHANAQS 2009 TRADE ESTIMATE REPORT 
 
REF: STATE 88685 
 
¶1. SUMMARY: The U.S. goods trade surplus with Ghana was $217 million 
in 2007, an increase of $120 million from $97 million in 2006.  U.S. 
goods exports in 2007 were $416 million, up 43.7 percent from the 
previous year.  Corresponding U.S. imports from Ghana were $199 
million, up 3.4 percent.  Ghana is currently the 95th largest export 
market for U.S. goods. 
 
¶3. The stock of U.S. foreign direct investment in Ghana was $237 
million in 2006 (latest data available), down from $239 million in 
¶2005. 
 
IMPORT POLICIES 
--------------- 
 
Tariffs: 
 
¶4. Ghana is a Member of the World Trade Organization (WTO) and the 
Economic Community of West African States (ECOWAS). Along with other 
ECOWAS countries, Ghana adopted a common external tariff (CET) in 
¶2005.  The ECOWAS CET requires that members simplify and harmonize 
ad valorem tariff rates into four bands: zero duty on social goods 
(e.g., medicine, publications); 5 percent on imported raw materials; 
10 percent on intermediate goods; and 20 percent on finished goods. 
Currently, Ghana maintains 190 exceptions to the CET. Tariff rates 
for the items covered under these exceptions are within the 0 
percent to 20 percent range, but will require some changes to align 
with the CET. Ghana is currently in a transition period and is 
negotiating  exceptions with ECOWAS. The deadline for agreement on a 
comprehensive ECOWAS CET was January 1, 2008, but this deadline was 
not met. 
 
Nontariff Measures 
 
¶5.  Importers are confronted by a variety of fees and charges in 
addition to tariffs. Ghana levies a 12.5 percent value added tax 
(VAT) plus a 2.5 percent National Health Insurance Levy on the duty 
inclusive value of all imports and locally produced goods, with a 
few selected exemptions.  In addition, Ghana imposes a 0.5 percent 
ECOWAS surcharge on all goods originating from non-ECOWAS countries 
and charges 0.4 percent on the free on board value of goods 
(including VAT) for the use of the automated clearing system, the 
Ghana Community Network.  Further, under the Export Development and 
Investment Fund Act, Ghana imposes a 0.5 percent duty on all 
nonpetroleum products imported in commercial quantities.  Ghana also 
applies a 1 percent processing fee on all duty free imports. 
 
¶6.  All imports are subject to destination inspection and an 
inspection fee of 1 percent of cost, insurance and freight (CIF). 
Importers have indicated that they would prefer a flat fee on each 
transaction.  The destination inspection companies (DIC) account for 
the longest delay in import clearance.  A 2008 study on port fees 
revealed that, out of the total transaction time of 69 hours for 
import clearance, DIC alone accounts for 45 hours.  Contracts of two 
of the four DICs expire at the end of 2008, but the other two have 
contracts that run through 2009 and 2010.  Due to lobbying from 
importers, the Ghana Customs has established a Customs Management 
System to take over the valuation and classification of imported 
goods from the DICs. The system, which is expected to go live on 
January 1, 2009, is expected to automate all key steps associated 
with customs entry processing, payments and clearance.  The new 
system is expected to cut down on transaction time because entry 
will now be electronic as against the current system where hard 
copies of documents are physically submitted to the offices of the 
DICs. 
 
¶7.  In July 2007, an ad valorem excise tax on locally produced and 
imported malt drinks, water, beer, and tobacco products was replaced 
with specific rates for each product. These changes were based on a 
study sponsored by Coca-Cola for the Ghanaian government.  The 
previous ad valorem excise tax on these products was between 5 
percent and 140 percent. More specific rates are now charged on a 
liter basis depending on the level of alcohol content. Carbonated 
soft drinks attract GHC 0.04 (about $0.04) per liter, while malt 
drinks attract GHC 0.05 per liter excise tax. 
 
¶8.  Tobacco products have a range of GHC 0.01 to GHC 0.03 per stick 
depending on the quality.  An examination fee of 1 percent is 
applied to imported vehicles.  Imported used vehicles that are more 
than 10 years old incur an additional tax ranging from 5 percent to 
50 percent of the CIF value.  Ghana Customs maintains a price list 
of vehicles that it uses to determine the value of used vehicles for 
tax purposes.  There are complaints that this system is 
nontransparent because the price list used for valuation is not 
publicly available. 
 
¶9.  All communications equipment requires a clearance letter from 
the National Communications Authority. 
 
¶10. Each year, between May and October, there is a temporary ban on 
the importation of fish, except canned fish, to protect local 
fishermen during their peak season. Ghana lifted its previous 
restriction on imports of U.S. boneQin beef (based on concerns 
regarding Bovine Spongiform Encephalopathy (BSE)). 
 
¶11.  Certificates are required for agricultural, food, cosmetics, 
and pharmaceutical imports.  The import procedures for these 
products are cumbersome.  Permits are required for poultry and 
poultry product imports.  The permit process is time consuming, and 
at the time the permit is issued, a nonstandardized quantity limit 
is imposed.  Ghana prohibits the importation of meat with a fat 
content by weight greater than 25 percent for beef, 42 percent for 
pork, 15 percent for poultry, and 35 percent for mutton.  Imported 
turkeys must have their oil glands removed.  Ghana restricts the 
importation of condensed or evaporated milk with less than 8 percent 
milk fat by weight, and dried milk or milk powder containing less 
than 26 percent by weight of milk fat, with the exception of 
imported skim milk in containers.  Effective November 1, 2007, the 
Ghanaian government imposed a temporary ban on the import of tomato 
paste and concentrates, citing Qunfair trade practices.Q  Temporary 
permits were, however, granted to some importers to import the 
tomato concentrate for canning. 
 
STANDARDS, TESTING, LABELING, AND CERTIFICATION 
--------------------------------------------- -- 
 
¶12. Ghana has issued its own standards for most products under the 
auspices of its testing authority, the Ghana Standards Board (GSB). 
The GSB has promulgated more than 343 Ghanaian standards and adopted 
more han 1,362 international standards for certification purposes. 
The Food and Drugs Board is responsible for enforcing standards for 
 
food, drugs, cosmetics, and health items. 
 
¶13. Under GhanaQs QConformity Assessment Program,Q some imports are 
classified as Qhigh risk goodsQ (HRG) that must be inspected by GSB 
officials at the port to ensure they meet Ghanaian standards.  The 
GSB has classified the HRG into 20 broad groups, including food 
products, electrical appliances and used goods. The classification 
of HRG is vague and arbitrary, and its scope has raised numerous 
questions. For example, the category of Qalcoholic and nonalcoholic 
productsQ could presumably include beverages, pharmaceuticals, and 
industrial products under the same classification.  The CAP process 
requires prior registration with GSB as an importer of HRG and GSB 
approval to import any listed HRG.  The importer must submit to GSB 
a sample of the HRG, accompanied by a certificate of analysis (COA) 
or a certificate of conformance (COC) from accredited laboratories 
in the country of export.  Most often, the GSB officials conduct a 
physical examination and check labeling and marking requirements and 
ensure that goods are released within 48 hours.  Currently, the fee 
for registering the first three HRG is GHC 50 (about $45) and GHC 20 
for each additional product.  Any HRG entering Ghana without a COC 
or COA from an accredited laboratory is detained and subjected to 
testing by the GSB.  The importer is required to pay the testing fee 
based on the number and kinds of parameters tested.  The GSB 
publishes most of its fees on its website.  U.S. companies have 
expressed concern that the standards that the Ghana CAP utilizes are 
difficult to determine and that independent third pfood products carry expiration dates or shelf life and requires that 
the expiry date at the time it reaches Ghana should be at least 
two-thirds the shelf life.  Goods that do not have two-thirds of 
their shelf life remaining are seized at the port of entry and 
destroyed. This requirement appears inconsistent with the Codex 
Alimentarius Commission General Standard for Labeling of Prepackaged 
Foods. 
 
¶15. Ghana passed provisional Biosafety legislation in March 2008 to 
specifically govern agricultural biotechnology, while waiting for 
the passage of a larger Biosafety regime. The regulations provide 
procedures for contained work and field trials on biotechnology 
products, release of these products into the environment, and 
importation, exportation, and transit of agricultural biotechnology 
products.  The law allows the National Biosafety Committee, through 
consultation with appropriate authorities to issue guidelines on 
labeling.  The PresidentQs Cabinet is currently reviewing a draft 
Biosafety Bill that establishes the National Biosafety Authority, 
which will be the administrative body responsible for all issues 
related to biotechnology in Ghana. 
 
 
GOVERNMENT PROCUREMENT 
---------------------- 
 
¶16. Ghana is not a signatory to the WTO Agreement on Government 
Procurement. In 2003, Parliament enacted a public procurement law 
that codified guidelines to enhance transparency and efficiency in 
the procurement process and assigned responsibility for 
administration of procurement to a central body.  In 2004, the 
government inaugurated the Public Procurement Board. Individual 
government entities have formed tender committees and tender review 
boards to conduct their own procurement.  Large public procurements 
are made by open tender and foreign firms are allowed to 
participate.  A draft guideline being applied to current tenders 
gives a margin of preference of 7.5 percent to 20 percent to 
domestic suppliers of goods and services in international 
competitive bidding.  Notwithstanding the procurement law, companies 
cannot expect complete transparency in locally funded contracts. 
Allegations of corruption in government procurement are fairly 
common. 
 
EXPORT SUBSIDIES 
---------------- 
 
¶17. Agricultural export subsidies were eliminated in the mid-1980s. 
However, the government uses preferential credits and tax incentives 
to promote exports.  The Export Development Investment Fund provides 
financing on preferential terms: an 18 percent interest rate, which 
is below market rates.  The Export Processing Zone (EPZ) Law leaves 
corporate profits untaxed for the first 10 years of business 
operation in an EPZ.  After 10 years the tax rate is 8 percent (the 
same rate for non-EPZ exporting companies).  Seventy percent of 
production in the EPZ zones must be exported.  The current corporate 
tax rate for nonexporting companies is 25 percent. 
 
INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION 
--------------------------------------------- 
 
¶18. Ghana is a party to the Berne Convention for the Protection of 
Literary and Artistic Works, the Paris Convention for the Protection 
of Industrial Property, the Patent Cooperation Treaty, the World 
Intellectual Property Organization (WIPO) Copyright Treaty and the 
African Regional Industrial Property Organization. Ghana has signed 
the WIPO Performances and Phonograms Treaty and the Patent Law 
Treaty.  Since December 2003, Parliament has passed six bills 
designed to bring Ghana into compliance with the WTO TRIPS 
Agreement.  The new laws address copyright, trademarks, patents, 
layout-designs (topographies) of integrated circuits, geographical 
indications, and industrial designs.  Regulations to define the 
procedures for comprehensive IPR protection and enforcement have not 
been promulgated.  However, copyright regulations were passed in 
July 2008, under GhanaQs legislative instrument 1933. 
 
¶19. Piracy of copyrighted works is known to take place, although 
there is no reliable information on the scale of this activity. 
Holders of intellectual property rights have access to local courts 
for redress of grievances, although very few trademark, patent, and 
copyright infringement cases have been filed in Ghana in recent 
years.  Government initiated enforcement remains relatively rare but 
the Copyright Office, which is under the Attorney GeneralQs Office, 
has initiated raids on markets for pirated works. The customs 
service has collaborated with IPR-concerned companies to check 
import shipments for specific counterfeit products. 
 
SERVICES BARRIERS 
----------------- 
 
¶20. The investment code excludes foreign investors from 
participating in four economic sectors: petty trading, the operation 
of taxi and car rental services with fleets of fewer than ten 
vehicles, lotteries (excluding soccer pools), and the operation of 
beauty salons and barber shops. 
 
¶21. Ghana allows foreign telecommunications firms to provide basic 
services, but requires that these services be provided through joint 
ventures with Ghanaian nationals. The National Communications 
Authority (NCA) has yet to become an effective mechanism to resolve 
complaints alleging that Ghana Telecom, the state owned national 
telecommunications operator, has engaged in anticompetitive 
practices. 
 
¶22. Ghana allows up to 60 percent foreign ownership in insurance 
firms. This cap does not apply to auxiliary insurance services, in 
which 100 percent foreign ownership is permitted.  Ghana allows 
foreign companies to provide a full range of insurance services, as 
long as they are registered as companies in Ghana. 
 
¶23. Foreigners may participate in banking and other noninsurance 
financial services but there are some conditions relating to 
nonresident foreigners.  Under the central bankQs new minimum 
capital requirement for banks, existing banks with Ghanaian majority 
share ownership (local banks) have until 2012 to fully increase 
their capital base to GHC 60 million (about USD 54 million)from GHC 
7 million (about USD 6.3 million), while banks with majority foreign 
ownership need to meet the target by 2009.  Shares held by a single 
nonresident foreigner and the total number of shares held by all 
nonresident foreigners in any company listed on the Ghana Stock 
Exchange may not exceed 10 percent and 74 percent, respectively. 
 
INVESTMENT BARRIERS 
------------------- 
 
¶24. Foreign investment projects must be registered with the Ghana 
Investment Promotion Center (GIPC), a process that is supposed to 
take no more than five working days but often takes longer. In order 
to improve its service, the GIPC in 2007, introduced an online 
registration system http://www.gipc.org.gh/forms_page.aspx. 
 
¶25. The following minimum equity requirements apply, in the form of 
either cash or its equivalent in capital goods, for non-Ghanaians 
who want to invest in Ghana: $10,000 for joint ventures with a 
Ghanaian; $50,000 for enterprises wholly owned by a non-Ghanaian; 
and $300,000 for trading companies (firms that buy/sell finished 
goods) either wholly or partly owned by non-Ghanaians.  The GIPC has 
proposed increasing the minimum equity for trading companies to $1 
million.  Trading companies must also employ at least 10 Ghanaians. 
Work visa quotas for businesses are in effect. 
 
ELECTRONIC COMMERCE 
------------------- 
 
¶26. Barriers to electronic commerce are mainly related to inadequate 
telecommunications and financial infrastructure.  The legal 
framework for electronic transactions is before parliament.  The 
payment system in Ghana is largely cash based.  The government 
established in June 2008 a national switch and a smart card payment 
system that links banks and financial institutions throughout Ghana 
and allows the use of point of sale and other electronic payments 
tools, but the enrollment rate has been slow. 
 
OTHER BARRIERS 
-------------- 
 
¶27. There are frequent problems related to GhanaQs complex land 
tenure system; establishing clear title on real estate can be 
difficult.  Non-Ghanaians can have access to land only on a 
leasehold basis. 
 
¶28. Frequent backlogs of cargo at the port hurt the business 
climate.  The Customs Service phased in an automated customs 
declaration system to facilitate customs clearance.  Although the 
new system has cut down the number of days for clearing goods 
through the ports, the desired impact has yet to be realized because 
complementary services from government agencies, banks, destination 
inspection companies, and security services have not been 
established. 
¶29. The residual effects of a highly regulated economy and lack of 
transparency in certain government operations create an added 
element of risk for potential investors.  Entrenched local interests 
sometimes have the ability to derail or delay new entrants, and 
securing government approvals may depend upon an applicantQs local 
contacts.  The political leanings of the Ghanaian partners of 
foreign investors are often subject to government scrutiny, and 
ensuring compliance with the U.S. Foreign Corrupt Practices Act 
(FCPA) is a challenge. 
TEITELBAUM