The export economy in my own world view, is a type of economy which specializes in adding value to natural resources to feed their citizens, industries and export the net-surplus products to generate revenue as foreign inflows to strengthen their local currencies.
Additionally, export economy is an economy which has 60% to gross domestic product (GDP) of a nation that is Export/GDP is 60%.
The examples of export economy are China, Russia, USA, etc, these countries normally have positive balances in their import to export.
H.S. Erfani’s 1999 work, published in the Journal of Development Economics, examined the relationship between exports, imports, and economic growth in semi-industrialized countries.
The OCE (2024) published that In December 2024 China exported $336B and imported $231B, resulting in a positive trade balance of $105B.
The world bank report 2024 indicated that the US is the world’s second-largest exporter of goods, with exports totaling $2.06 trillion in 2024, and its top exports include civilian aircraft parts, oil, gasoline, and liquefied natural gas. Canada and Mexico are the leading destinations for US exports.
The export economy has the following advantages:
- Increase in gross domestic products (GDP) to at least 30% to 60% year-on-year (YoY).
- Generate foreign currencies to help stabilize the local currency.
- Positive impact in import cover to at least 6 to 12 months
- Growth in industrialization.
- Job creation for skilled and unskilled.
It is very important to analyze the export sector of Ghana and profess the opportunities therein:
Ghana Statistical Services trade report 2024 indicated as Ghana’s exports in 2024 is GH₵294.9 billion given $20.6 billion.
The Ghanaian export sector is in tow segments as traditional export and non-traditional export.
These export segment have the capacity to generate jobs and generate forex inflows to strengthen the Ghanaian currency against the foreign currencies. Below is the split of both segments to GDP in 2024:
How can government develop the export sector for Ghana to be seen as export economy
- Initiate strong government policy to deliberately be private sector led.
- Government must export finance policy for financial participation by private financial institutions to finance export firms. Government policy should focus on derisking export finance credit risk
- The government must launch a special purpose vehicle (SPVs) to create patient capitals to enable financial institutions to participate and on lend to export firms.
In conclusion, export economy has a great potential to industrialized and an economy, create wealth, increase GDP growth, create jobs and strengthen local currencies against foreign currencies and long duration for import cover.
By CHRISTIAN MENSAH
The writer is an expert in International business and export trade management.
Mobile : 233544492206
