GEPA set to Promote Export of Professional Services in Ghana

Introduction

Over the past decade, services have been the fastest growing sector of the world economy. Services now account for approximately two-thirds of the world’s economic activity, with trade in services contributing over 20% of world trade, and over US$1.3 trillion annually. Over half of the world’s workforce is employed by service enterprises, which also create most of the new jobs. The contribution of services to Gross Domestic Product (GDP) in the majority of countries is well over 50%, and in some cases as high as 70%. Furthermore, new information and communications technologies are increasing the tradability of services. Some analysts predict that over the next 20 years, services trade will capture 50% of world trade.

Difference between Services and Goods Export

The most obvious difference between exporting a good and exporting a service is that with service, you are exporting something invisible, intangible and most of the time non-storable. In fact services are simultaneously produced and consumed; for this reason services have a different business rhythm. When you are selling a product, you can send samples and you can replace it if it does not work. It is not the case with selling services. In fact, what you are selling is a promise: a promise that you will meet the client’s need at a pre-determined price and within a pre-determined timeframe.

The Economist says that ‘Anything that is sold in trade that could not be dropped on your foot is a service!’ –

WTO

The World Trade Organisation (WTO) Secretariat has divided Services into 12 service sectors:

1. Business (e.g. professional and computer)
2. Communication
3. Construction and Engineering
4. Distribution
5. Environmental
6. Financial and Banking
7. Health
8. Educational
9. Tourism and travel
10. Recreational, cultural, sporting
11. Transport
12. Other services not included elsewhere

The share of developing countries in trade in services has increased considerably. Travel and tourism are the most dynamic but considerable progress is being made in communication, construction and business services.

The growth of the Services Sector in Ghana

Ghana’s service sector provides good prospects for the growth of the Ghanaian economy, contributing about 41.4% to GDP. The sector in Ghana is characterized by a variety of services that include construction and allied engineering services, information technology, business services, freight forwarding services, banking services, health care, education and tourism, among others. In 2003, Ghana Export Promotion Authority (GEPA), with the keen support of the Private Enterprise Foundation (PEF) started an awareness creation of the potential of the services sector. A Services Export Department was established in 2004 with the responsibility to coordinate the Authority’s collaborative efforts with other stakeholders to promote the services export sector.

Government Policy Direction

In recognition of the growing importance of services trade in foreign exchange earnings, job creation and GDP growth, the Government of Ghana through the Ministry of Trade and Industry and GEPA took steps to mainstream services export into national trade policies and schemes and the Non-Traditional Exports portfolio. The 2007 Government Budget and Economic Policy duly captured Government’s intent in this matter. GEPA spearheaded extensive consultations with professional associations and the services industry to design a practical strategy to link Ghana to the global services supply chain.

Current Areas of Focus in Ghana

By 2008, a Services Export Development Strategy document was launched. The following four sectors have been selected as key areas of for promotion:

• Higher Education
• Medical Tourism
• Business Process Outsourcing
• Professional Consultancy Services.

Conclusion

The potential of the services sector, as an area of export activity, to become a vehicle for Ghana’s economic development cannot be over-emphasized. GEPA is facilitating selected service exporters, particularly, Tertiary Education institutions to participate in the 2017 Lagos International Fair. Interested institutions can contact GEPA’s Marketing Department. This is part of national efforts to promote the sector to enhance foreign exchange earnings, create jobs and contribute to GDP growth. GEPA will continue to work closely with all stakeholders to ensure that services export make significant contribution to NTEs.