Modern Economy, 2014, 5, 384-390 Published Online April 2014 in SciRes. http://www.scirp.org/journal/me http://dx.doi.org/10.4236/me.2014.54037 How to cite this paper: Oduro, A.D. and Offei, E.L. (2014) Investigating Ghana’s Revealed Comparative Advantage in Agro-Processed Products. Modern Economy, 5, 384-390. http://dx.doi.org/10.4236/me.2014.54037 Investigating Ghana’s Revealed Comparative Advantage in Agro-Processed Products Abena D. Oduro, Emmanuel Larbi Offei Department of Economics, University of Ghana, Legon, Ghana Email: abena.oduro@gmail.com Received 29 October 2013; revised 29 December 2013; accepted 20 January 2014 Copyright © 2014 by authors and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY). http://creativecommons.org/licenses/by/4.0/ Abstract Export diversification through agro-processing has been a policy objective of successive govern- ments. In the most recent policy document the processing of horticultural products including fruits has been emphasised. Using four indices of revealed comparative advantage, nine agro- processed product groups have been identified in which Ghana has a comparative advantage. However, the share of agro-processed products in which Ghana has a comparative advantage de- clined over the period 2004 to 2011. We recommend that policies should be designed to encour- age expansion of exports in the nine identified product groups as well as to reverse the decline in the share of agro-processed products in which Ghana has a comparative advantage. Keywords Revealed Comparative Advantage, Agro-Processing, Exports, Ghana 1. Introduction Ghana’s exports are dominated by three primary commodities, i.e. gold, cocoa and timber. Together they ac- counted for between 63% and 75% of the total value of merchandise exports in 2004 and 2011 respectively. To reduce the over-reliance on these commodities the focus of government policy is on export diversification through adding value to raw materials. Adding value to agricultural commodities has been identified as the logical step towards achieving the objective of export diversification. In the second Ghana Poverty Reduction Strategy Paper for the period 2006-2009 a component of the trade and industrial strategy was the promotion of small-scale agro-processing for exports. The document did not identify any particular products or industries for support. In the Ghana Shared Growth and Development Agenda for the period 2010-2013, export diversification through agro-processing was again included as a strategy and particular focus was placed on the processing of horticultural crops including fruits. Agro-processing may be defined as the transformation of raw materials and intermediate products originating