Following the official launch of the five operational instruments to govern the working phase of the Africa Continental Free Trade Area (AfCFTA) agreement last week, key stakeholders in Ghana’s export and trade sectors have initiated moves to draw a roadmap to maximize the potential benefits of the trade policy by local producers of goods and services.
This is under the auspices of the Ghana Export Promotion Authority (GEPA) in collaboration with the Africa Centre for Economic Transformation (ACET) bringing together representatives from the Ministry of Trade and Industry, International Chamber of Commerce, the Institute of Statistical, Social and Economic Research (ISSER) as well as some trade technocrats.
The roadmap is aimed at setting modalities for export-oriented indigenous Small and Medium-sized Enterprises (SMEs) to harmonize trade strategy for exploiting the benefits and opportunities as well as ameliorating key challenges of the policy.
The initiative follows concerns raised by some financial and economic analysts cautioning of the possibility of economies of scale making it difficult for a number of small enterprises in Ghana to compete with multinational entities operating across the continent in terms of production and procurement costs and consequent pricing of the goods they will be offering around Africa, import duty free.
The sensitization seminar is expected to boost the potential competitiveness of local businesses ahead of the AfCFTA’s commencement which is scheduled to be implemented in July 2020, by both suggesting optimal business strategies for SMEs and considering how Ghana’s trade policy can be improved for their benefit.
Importantly, the Africa Union (AU) Commission has drafted a report containing recommendations to boost the competitiveness of small businesses in each respective country to enable them compete despite lack of economies of scale and consequent pricing challenges.
Key among the proposals in the report include catering for the interest of small-to-medium cross-border traders by simplifying trade regimes applicable to them which are aimed at boosting their business activities.
Speaking exclusively with the Goldstreet Business, Director of Projects at GEPA, Alexandar Dadzawa said countries who have ratified and signed the agreement are positioning themselves to take advantage of the market opportunities and that there was the need for continuous sensitization for local business to be able to compete.
“As a government agency whose principal mandate is to promote and develop exports, we see the continental free trade area as an opportunity for Ghanaian businesses to utilize their full potentials”, he noted.
In Ghana, it is estimated that SMEs contribute more than 70 percent of Ghana’s Gross Domestic Product (GDP) and account for 92 out of every 100 businesses. Globally, the contribution of small enterprises to the growth of national economies is considered as significant.
The AfCFTA is expected to increase intra-African trade by 60 percent by the end of year 2020, remove tariffs on 90 percent of goods, liberalise services and tackle other barriers of inter-African trade, such as long delays at border posts.
This article was published by Goldstreet Business.