Post Brexit uncertainties are playing out seriously as banana exporters are beginning to feel the brunt. Already, we are told UK companies have begun rejecting imports from Ghana as the country and Britain have failed to reach a trade agreement.
Banana exporters have lost 20% of their exports to the UK and could lose more. The three leading banana exporters; Golden Exotics, Volta River Estates and Blue Skies have indicated that this could result in major layoffs.
The three companies together employ 5,000 workers directly and about 25,000 workers indirectly. Exporters and businesses are hoping that the Ghanaian authorities can quickly resolve issues with their British counterparts, in order not to create any disruptions in trade.
With no prospect of a deal being reached in time for Ghana, imports will temporarily be subject to Britain’s Generalised Scheme of Preferences – a framework that applies import tariffs at reduced rates on developing countries.
However, Britain’s exports to Ghana would continue to be subject to World Trade Organisation tariffs. Official data shows Britain exported goods and services worth 722 million pounds to Ghana in 2019, and imported 498 million pounds of goods: mostly oil, fish, cocoa and fruit.
Despite long-standing warnings over the complexities faced in rolling over EU trade agreements with West Africa and the need for transitional arrangement to avert a highly damaging hiatus in trade relations between Ghana and the UK, on 3rd January 2021 the UK government imposed standard MFN tariffs (£95/tonne) on Ghanaian bananas landed in the UK.
Government has long expressed concerns over the need to ensure consistency between it tariff commitments under the UK agreement and its regional ECOWAS trade protocol commitments.
George Kporye, corporate affairs manager of the banana-exporting company Golden Exotics, has highlighted how the issue of UK tariffs on Ghanaian banana exports was placing the ‘entire operation’ under threat and putting ‘4,500 direct jobs and tens of thousands of others at risk’.
Before the Brexit trade deal between the United Kingdom and the European Union was agreed on December 24, Britain made it clear it wanted to be Africa’s investment partner of choice.