Editorial: EU lauds balanced trade relations with Ghana…

In launching Europe Month in Accra recently, the European Union (EU) Ambassador to Ghana, Rune Skinnebach pointed out the stark contrast in the trade relations of Ghana with the EU and China.

Mr. Skinnebach said Ghana currently exports very little to China but imports extensively from it, suggesting a growing trade imbalance while describing EU-Ghana trade as largely even.

Skinnebach believes the growing trade imbalance puts pressure on the local economy. To him, the country’s trade model with China is contributing to job losses in domestic industries, rising foreign debt, lower GDP growth, currency depreciation and increased dependence on a foreign economy.

He contrasted this with Ghana’s trade arrangement with the EU, which he said is supported by the Economic Partnership Agreement (EPA). The agreement allows duty-free and quota-free trade, helping to maintain a more balanced exchange of goods between both sides.

This framework, according to Ambassador Skinnebach, ensures that the country’s exports to the EU remain competitive and consistent. However, in earlier years, Ghana imported significantly more from the EU than it exported, driven largely by demand for machinery, vehicles, pharmaceuticals and industrial inputs.

But export earnings from key commodities such as cocoa, gold and oil-related products have improved periodically, helping to moderate the overall deficit.

Thus, recent data indicate a gradual move toward more balanced trade flows, particularly as Ghana’s export revenues strengthen in line with global commodity price movements.

By 2025, available estimates suggest EU exports to Ghana stood at about US$3.74billion while imports from Ghana reached approximately US$4.09billion – pointing to a near-balanced position in goods trade, depending on classification coverage.

On the other hand, Ghana’s trade with China over the past five years has been heavily skewed in China’s favour, reflecting a persistent structural trade deficit.

This imbalance is driven by the country’s relatively low export volumes to China compared with its significantly higher import bill, which is dominated by machinery, electronics, vehicles, iron, steel and manufactured goods.

Meanwhile, Ghana’s shipments to China are concentrated in a narrow range of primary commodities including mineral fuels, ores, gold and cocoa which remain highly sensitive to global price fluctuations.

In 2023, Ghana exported about US$1.38billion worth of goods to China while importing roughly US$3.07billion, widening the deficit to around US$1.7billion. Overall, the trend over a five-year period points to a consistently widening trade deficit – reinforcing concerns about import dependence and limited export diversification.

This track record reflects the EU’s reliability as a partner, the EU ambassador remarked.

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