To the new Mahama administration: Leveraging Ghana-China partnerships for industrial growth and economic transformation

Ghana’s economic growth continues to gain momentum, driven by efforts toward industrial expansion, trade diversification, and digital transformation.

As Ghana enters a new phase under President Mahama’s leadership, the country is poised to capitalize on global economic shifts, strengthen its partnerships with China, and deepen its involvement in the African Continental Free Trade Area (AfCFTA).

The previous administration laid a strong foundation for economic stability by securing debt relief, improving macroeconomic stability, and advancing key infrastructure projects.

Under the IMF-supported Extended Credit Facility (ECF), Ghana has seen significant improvements in its fiscal space, setting the stage for strategic investments in the country’s future growth.

China’s evolving role under the Forum on China-Africa Cooperation (FOCAC) presents Ghana with the opportunity to expand its economy through Public-Private Partnerships (PPPs), skills development, and industrial investments.

Addressing the Ghana-China Trade Imbalance

One of the major challenges in Ghana-China economic relations is the persistent trade imbalance. Ghana’s exports to China—mainly raw materials such as crude oil, cocoa, and gold—remain significantly lower than the imports from China, which consist of manufactured goods, machinery, electronics, and textiles.

Key Trade Data

In 2023, Ghana’s exports to China were valued at approximately $3.8 billion, while imports from China reached $8 billion. This created a trade deficit of over $4 billion, highlighting Ghana’s heavy reliance on Chinese imports.

Proposed Solutions to Balance Trade

1. Increase Value-Added Exports to China Ghana needs to shift focus from raw materials to processed and semi-processed goods such as:

   • Processed cocoa products (chocolate, cocoa butter)
   • Refined gold and jewelry
   • Manufactured timber products

   With China’s Green Lanes Initiative providing duty-free access for African agricultural exports, Ghana should negotiate expanded access for value-added goods instead of raw materials.

2. Leverage AfCFTA to Develop Regional Supply Chains Ghana can position itself as a key manufacturing hub in West Africa under AfCFTA. Encouraging Chinese factories to source raw materials locally instead of importing from China could create jobs and reduce import dependency.

3. Encourage More Chinese FDI in Ghana’s Industrial Sector Incentivizing Chinese firms to produce goods in Ghana, rather than exporting finished products from China, could reduce imports. Joint ventures with Chinese manufacturers could help establish local factories in sectors like:

   • Automobile assembly and spare parts production
   • Pharmaceutical manufacturing
   • Textile and garment industry

4. Target Chinese Companies for Agro-Processing Investment With China’s growing middle class, Ghana should attract Chinese agribusinesses to invest in local processing plants for export-oriented industries such as cashews, palm oil, and fruit juices. This would reduce the trade imbalance and enhance agricultural exports.

5. Trade Negotiations: Reducing Tariffs and Non-Tariff Barriers Ghana should engage in high-level talks with Chinese trade officials to:

   • Reduce tariffs on Ghanaian goods.
   • Address non-tariff barriers such as sanitary measures that limit agricultural exports.
   • Simplify export procedures to increase the competitiveness of Ghanaian businesses in the Chinese market.

6. Bilateral Agreement on Trade Rebalancing Measures Ghana should negotiate a bilateral framework with China to:

   • Increase Ghanaian exports to China.
   • Encourage Chinese industries to manufacture in Ghana.
   • Facilitate Ghanaian companies’ access to China’s e-commerce platforms like JD.com and Alibaba.

Implementing these measures could reduce Ghana’s trade deficit with China by at least 30% within the next five years.

Economic Expansion and Strategic Partnerships

Ghana’s GDP is projected to grow by 5.6% in 2025, driven by:

• Increased industrial production.
• Expansion of regional trade through AfCFTA.
• Sustained foreign direct investment (FDI).

1. Industrialization and Manufacturing Expansion Ghana’s industrial sector remains a key driver of economic transformation. Strategic partnerships with China’s leading corporations will enhance local production, technology transfer, and export diversification.

   Electric Vehicle (EV) Manufacturing Ghana’s lithium reserves, valued at over $10 billion, offer a strategic advantage in the EV supply chain. A PPP approach with China’s BYD Auto and CATL could establish battery manufacturing and EV assembly plants.

   • Estimated investment: $1.5 billion over five years.
   • Projected job creation: 10,000 direct and indirect jobs.

   Heavy Industry and Manufacturing Expanding Tema Steel Works Ltd. through a joint venture with Baowu Steel Group could significantly boost steel production.

   • Expected investment: $800 million.
   • Job creation: 6,000 jobs in steel production and downstream industries.

2. Infrastructure Development through PPPs Ghana should prioritize equity-based partnerships over debt financing for infrastructure projects such as:

   • Expansion of Tema and Takoradi Ports.
   • Railway infrastructure linking mining regions to export hubs.
   • Urban transportation systems in Accra and Kumasi.
   • Renewable energy projects.

   Projected Economic Impact:

   • $5 billion in infrastructure investments by 2027.
   • 50,000 jobs created in construction and logistics.

3. Digital Economy and AI Collaboration with Chinese firms like Huawei could expand 5G infrastructure, while JD.com and Alipay could integrate digital payments into Ghana’s fintech sector. DeepSeek AI could collaborate on AI-driven industrial automation.

   • Projected Investment: $500 million in digital infrastructure by 2027.
   • Projected Job Creation: 20,000 jobs in tech and digital services.

4. Strengthening Bilateral Coordination Establishing a China Desk at the Presidency will ensure strategic oversight of Ghana-China engagements. Additionally, high-level trade delegations to China can secure industrial and export agreements.

Strategic Path Forward

Ghana’s economic engagement with China must be strategic, balanced, and focused on long-term benefits. Key priorities include:

• Public-Private Partnerships for industrial expansion.
• Skills transfer and job creation through local manufacturing.
• Trade diversification under AfCFTA to balance Ghana-China trade.
• Renewable energy investments to support industrialization.
• Bilateral trade rebalancing framework to close the deficit gap.

If executed effectively, these initiatives will not only reduce Ghana’s trade imbalance with China but also strengthen its industrial base, positioning the country as a leading economic hub in West Africa.