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Keywords Export, Ghana, Finance
Abstract In order to provide a better understanding of export financing in Ghana this exploratory study was undertaken on a sample of non-traditional exporting firms and selected banks. The focus is on export financing in Ghana. Ghanaian exporters hardly obtain finance for export operations. Interest rates are high, and financial institutions prefer granting shortterm credit to medium or long-term credit, and investing in government treasury bills and bonds rather than lending to small and medium-sized firms. Small and medium-sale exporters hardly meet the requirements of banks to access credit, especially collateral. Default on loans has been high. Exporters need to be more responsible in funds utilization, just as the financial institutions have to be more exporter-friendly to ensure the success of the national export-led growth strategy. The recent (2000) Export Development and Investment Act is likely to provide greater access to export finance for exporting firms.
A focus on the
non-traditional sector Background Ghana's export performance and Vision 2020
Ghana's 25-year development plan (1995-2020) otherwise known as Vision 2020, is to make Ghana a middle-income country by the year 2020. Ghana's development plans and revenue projections are dependent on the expected earnings from exports. According to the Ghana Export Promotion Council (GEPC) (a definition of terms used in this article can be found in the Appendix), for the export sector to play its role in the realization of the vision, exports are to reach $16.0 billion by the year 2020. Since this cannot be realised by the traditional export sector (cocoa, timber, gold and other minerals) due to sectoral and market constraints, export diversification, with a focus on the non-traditional sector, is seen as the strategy for export growth. Growth continues to be impeded by low earnings from exports Ghana has, since its independence, depended on her traditional exports as the major source of export revenue but the prices of traditional exports have been unstable on the world market. Traditional exports are defined by the ImportExport Act of 1995 (Act 503) as cocoa beans, logs and lumber, unprocessed gold and other minerals and electricity. Non-traditional exports are defined by the GEPC...