Most emerging economies such as China, Hungary, Brazil and even Mexico have been very successful in improving trade performance in their respective countries.
However, one challenge that works against successful trade performance is the high cost of trading faced by many emerging economies, as well as developing countries.
This is often the result of poor infrastructure, as well as cumbersome procedures at borders of these countries. But, Ghana and most of these countries have identified the anomaly and are taking steps to address it.
Some of these measures are trade-related infrastructure and trade facilitation which seeks to address such constraints and has been effective in improving trade performance and competitiveness.
It is also important to put on record that the government’s collaborations with the private sector could also help contribute positively to trade performance.
Three vita ingredients could ensure a country’s successful trade performance: support for trade-related infrastructure such as roads, railways, ports, energy and telecommunication; trade facilitation and the improvement of rules and procedures that govern how goods cross borders.
Fortunately, most of these reforms have already been constituted but the challenge ,therefore, is how to ensure its effective implementation.
The government,few years ago, implemented the singled window programme and subsequently embarked on a US$1.5 million Tema Port expansion project.
It also introduced the paperless clearance system, mandatory joint inspection of goods at the ports by GCNET and West Blue and removal of all customs barriers.
The reforms and expansion is not only to link Ghana to the global logistic market but also open up new trade opportunities for industry players to bridge the countries trade deficit.
The state agencies could facilitate economic performance, for example by ensuring that these reforms are executed effectively at the ports.
The citizenry are ,therefore, hopeful that the effective implementation of the single window platform will make port operations efficient and significantly enhance revenue generation, as well as to help improve trade.
Experience from emerging economies present lessons on how overlapping challenges that impede the private-sector financing of infrastructure have been tackled.
In a nutshell, it is important to establish a favourable institutional environment for infrastructure development, look for domestic institutional investors and seek foreign investment with the support of the public sector.
This could be done by providing credit guarantees, supporting public-private partnerships (PPPs) and enabling private participation in infrastructure for instance by enhancing upstream preparation involving sector, policy and legal and regulatory reforms.
In most developed countries, bank loans have helped to secure long-term financing which is essential for infrastructure investments.
The main substitute for bank finance for infrastructure if, for instance, governments are not prepared to agree to enough contingent fiscal liability is to search for domestic institutional investors.
The creation of new pension schemes offers some potential by producing a market for local currency-denominated long-term securities, thereby reducing the demand for bank finance.
Less developed countries could search for foreign investors, a move that could be supported by the provision of credit guarantees from the public sector, either directly through loan guarantees or indirectly through regulatory forbearance at public sector banks.
A country such as Brazil has motivated foreign companies to invest under a PPP initiative.
Boosting the use of information
Following the example of emerging economies, it is essential for less developed countries to boost the use of information and communication technology, promote electronic data interchange and single window facilities for submission and processing of information and documents.
They must also support the harmonisation of documentary requirements across countries, minimise physical inspections in particular through adoption of risk management techniques and introduce industry and sector-specific trade facilitation initiatives such as for agricultural products or low-valued exports.
While these trade facilitation approaches offer the potential to enhance a country’s trade performance, improvements in trade performance also call for tackling the supply-side constraints to a country’s potential to make use of improved trading conditions.
The experience from these developed countries suggests that one major focus should be on the implementation of straightforward trade facilitation measures and on prioritising paperless trade through the use of information and communication technology.
In most countries, for example, paperless clearance procedures have increased the speed of customs clearance dramatically.
Compared to traditional customs procedures, using paperless customs clearance reduces the average time spent on imported and exported products by 9.3 and 0.7 hours respectively.
Less developed countries should also consider the introduction of risk management techniques to reduce the need for inspections.
In addition, trade facilitation policies for low-valued exports have real potential for many less developed countries which could draw inspiration from their introduction in countries such as Brazil.
In that country, the government is reported to have simplified export procedures for exports of value less than US$10,000, while addressing the problem of limited access to affordable transport for small and medium-sized enterprises by making greater use of the postal network, supporting them in exporting their products quickly.