Business News of Wednesday, 22 January 2020
An Economist, Kwame Pianim has warned that if Ghana doesn’t influence the trade protocols in the implementation of the African Continental Free Trade Area (AfCFTA), it may not benefit the citizenry because the country currently does not have a viable industrial base.
According to him, the current trade regime for Ghana is only based on imports and expects the Minister for Trade and Industry, ‘to be busy’ discussing with industry players on the trade protocols towards implementing the AfCFTA.
“We are assuming that because the African Continental Free Trade Area is going to have a secretariat in Ghana, we are going to benefit? We are not going to benefit because we don’t have a viable industrial base.”
Pianim cited countries like Kenya, Rwanda, Ethiopia, North and South African nations as ones poised to benefit from the AfCFTA agreement due to their strong industrial base. “These are the countries that are going to benefit and we’re just going to be importers,” he added.
“Ethiopia for an example has an industrial base and they’re selling electricity at 15 cents per kilowatt hour, what industry do we have and if Ghana does not influence the protocols of the free trade agreement that will determine what goods we can export to what country,” he explained on Citi News.
Recently, President Akufo-Addo gave an assurance that the Secretariat of the Africa Continental Free Trade Area (AfCFTA) will be up and running by March this year for trading activities to begin in the free trade area by July this year.
When addressing the Ghana Investments and Opportunities Summit on Tuesday as part of the UK-Africa Business Summit in London, he indicated that to reap the fruits of the AfCFTA and realise the vision of a Ghana Beyond Aid, the government’s first order of business was to continue to ensure the maintenance of macroeconomic stability to facilitate the growth of Ghana’s economy.
“We know that the success of the AfCFTA would mean the era of low volumes of intra-regional trade that have defined the activities of African economies will come to an end,” the President stated.
The African Continental Free Trade Area agreement
The African Continental Free Trade Area agreement (AfCFTA) will constitute the world’s largest free trade area, consolidating an integrated market of 1.3 billion consumers with a combined gross domestic product (GDP) of approximately US$3.4 trillion.
The objective is to realise a continent-wide single market for goods and services with free movement of business, persons and investments.
The AfCFTA envisions to expand intra-African trade and intensify regional integration by successively eliminating tariffs on 90% of product categories.
Removal of such trade barriers, assures to not only improve efficiency, enhance competition, and incentivise development of strategic solutions to local challenges through regional economies of scale, but essentially advance the efficacy of resource allocation.