An analysis of the performance of Ghanaian canned tuna export to EU market (1999-2009)

Abstract

The tuna fishery is an important sector in Ghana. In 2009, total landing of tuna in Ghana represented about 24% of total catches in the East Atlantic. Canned tuna is Ghana’s most important non-traditional export commodity in terms of foreign exchange earnings. The main focus of this thesis is to analyze the performance of Ghanaian canned tuna export to the EU -27 market. Performance is measured in terms of Ghana’s competitiveness relative to the performance of other exporting countries; namely, Cote d’ Ivoire, Ecuador, Madagascar and Thailand. The competing countries are all leading exporters of canned tuna and were chosen to reflect regional balance and different trading and tariff systems in the EU market. The performance indicators employed for the study are two measures of specialization; the Revealed Comparative Advantage (RCA) and the Revealed Symmetry Comparative Advantage (RSCA) and a measure of competitiveness, the Market Share (MS) Index using yearly data from 1999 -2009. To infer competitiveness from the changes in export value over time, a first- level Constant Market Share (CMS) analysis was used to decompose the changes in export value into a structural effect, competitive effect and second-order effect. To augment this technique, an empirical analysis on the determinants of the Ghana’s canned tuna export was conducted using the Armington trade model by OLS regression on monthly data from January 1999 – December 2009, with quantity market share as the dependent variable. The results of the indices of specialization, shows that, Ghana has comparative advantage in the export of canned tuna to the EU -27 throughout the study period. In terms of competitiveness, Ghana’s market share value has declined over the study period. Judging by the operational definition of competitiveness, Ghana has been less competitive. The CMS decomposition of changes in export values indicates that the changes in export value of Ghana can be attributed to structural effect (growth of the market) mainly. The results of the regression analysis indicate that, price ratio, the level of specialization and trade policy effect have statistically significant effect on the quantity market share of Ghana.