The Third World Network, a pan-African research and advocacy organisation has charged government to exhaust all avenues for consultation with key stakeholders in the economy, to ensure that Ghana does not lose out following the coming into force of the African Continental Free Trade Area agreement on May 30, 2019.
Ghana’s Parliament in April 2018 ratified the African Continental Free Trade Agreement becoming the second country after Rwanda to ratify the agreement.
Signed by 44 African countries in Kigali, Rwanda, in March 2018, the agreement is meant to create a tariff-free continent that can grow local businesses, boost intra-African trade, rev up industrialization and create jobs.
The agreement creates a single continental market for goods and services as well as a customs union with free movement of capital and business travellers.
As of May 2019, 52 of the 55 African Union states had signed the agreement, with Benin, Eritrea and Nigeria the only countries not signing the agreement. Proponents of the African Continental Free Trade Agreement (AfCFTA) say it has the potential to boost economic growth on a continent of 55 nations under the African Union with a combined gross domestic product of more than $3 trillion dollars and a young, expanding population.
While highlighting the significance of the agreement and its potential benefits for Ghana, the Executive Director at the Third World Network Africa, Dr. Yao Graham said it will be in Ghana’s interest to learn from past trade liberalization exercises.
“When you go back to our own national experience of trade liberalization, people continue to complain that our manufacturing sector was wiped out because of liberalization, that our farmers are suffering because of liberalization and people are complaining about dumping of goods from here and there. Now the fact that the liberalization is taking place amongst African countries does not do away with those issues, because your economies are opening up to each other.”
The African Continental Free Trade Agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. But according to Dr. Graham care must be taken by government to ensure that extensive consultations are done with multiple stakeholders to ensure that whatever positions Ghana adopts in relation to the agreement benefits the countries business community.
“The question to the government is what is its thinking about the pros and cons of the AfCFTA for Ghana and what is it doing to engage in a truly participatory process internally so that whatever positions are taken optimizes the benefits of the AfCFTA for Ghanaian businesses and citizens and minimizes the negatives for them.”
Dr. Yao Graham finally warned of the possible dangers of an unplanned liberalization process for the continents growing services sector.
“Most of our countries because of years of structural adjustment, our services sectors are dominated by foreign companies. So if you don’t have a proper approach you will end up with services liberalization in Africa not being services liberalization that improves the prospects of African businesses but simply creates an African market for foreign companies.”
Among the other outstanding issues to be resolved for the effective implementation of the AFCFTA, include arbitration measures, certifying the origins of goods, tackling corruption and improving infrastructure. The Africa Union on its part says it envisions the free trade zone, once fully implemented, driving economic integration and spurring investment within the continent.
But critics say poor infrastructure and a lack of diversity between the various economies could throw up barriers to this envisioned integration. The African Union hopes a progressive elimination of tariffs will help boost intra-Africa trade by 60 percent by 2022.