ANALYSIS OF THE PERFORMANCE OF EXPORT PROCESSING ZONES IN GHANA

Abstract

Free Zones (also referred to as Export Processing Zones) have been effectively used and are currently being applied in a variety of settings to introduce market oriented economic and institutional policy reforms in several countries such as Ireland, South Korea, Republic of China, Mauritius, Namibia, Togo and Nigeria. In some of these countries, the application of the Free Zones/EPZ policy have had the effect of encouraging competitive enterprises to establish themselves within zone boundaries mainly to produce export. The study adopted both quantitative and qualitative approach to research. Primary data obtained through the use of questionnaire and interviews. 100 registered free zones companies out of the 176 total existing companies were sampled based on the 2007 Ghana Free Zones Board Annual Report using simple ramdom and purposive sampling. Although free zones companies can be found in other regions such as Western, Ashanti and Volta, they are mainly concentrated in Tema and Accra including those in the TEPZ enclave. The main objective was to analyse the export performance of free zones companies in Ghana from 2003 to 2008. Variables used included; exports of FZ companies, export-employment ratio, net exports and value added. The study also looked at the generation of foreign exchange and employment created by these companies from 2001 to 2008. From the results of the study, it could be seen that while national exports are increasing over time, FZ exports have been inconsistent over time. The result depicts that although the number of FZ companies have been increasing since its inception, exports from these companies have not significantly affected gross exports from the country. It was observed that exports from FZ companies have been less than 10% of total exports. This deviates from a number of FZ/EPZ in previous work where FZ/EPZs contribute significantly to the country‟s exports and improving their economy as indicated earlier in this chapter. Peter L Watson in ‘Export Processing Zones: Has Africa missed the boat”, noted that although there is a potential for Africa to benefit from export-oriented growth based on the development of FZ/EPZs, it would not be easy. The country would need to put together a cooedinated package of incentives, infrastructure and services that will attract foreign investors. He also cited attitude and culture as playing an important role in the success of these zones