The virus pandemic has had disastrous impact on the Ghana, with every facet of the economy taking a knock. Disruptions to commercial supply chains and trade and a subsequent business shutdown had a tolling effect on jobs, livelihoods and disposable incomes.
The first among many other lessons that the pandemic has taught the nation is the long known fact that our economic prospects hinge on expanding regional value chains across through a well-thought through and implementable actions aimed at expanding our industrial or production base.
In truth, the setbacks suffered across local supply chains due to the pandemic necessitates re-shoring our industrialization and trade efforts, and luckily so when there is a ready market with a size that ranks it among the largest continental trade blocs.
Ghana’s post-Covid recovery will largely be anchored on increased economic integration as well as unlocking its production potential to meet local demand across strategic sectors, and for the single continental market.
Industrialisation has become our surest and reliable medium through which we can position the private sector to rake in the right levels of opportunities and benefits of the AfCFTA as we seek to restructure the local economy through trade integration.
A council of ministers of trade across the continent have unanimously called for physical trading to start under the AfCFTA with about 88percent of approved rules of origin, pending its endorsement by the heads of states.
“The most significant of it is that we’ve bid down key rules of origin that allows us to say with confidence to heads of states that we have a package of products that we can start trading on,” says Ebrahim Patel, South Africa’s Minister of Trade, Industry and Competition, and who also heads the council, at its recent meeting.
The significance of this step is that barely any last minute hitches, we are likely to see the physical movement of good or trade under the single continental area agreement, with most of the critical infrastructure and systems having been put in place.
Coming out of the pandemic, Ghana’s economic recovery efforts and sustainability will be pillared on how it is able to seize the enormous offerings of the single African market, and at the heart of measures of the government and interested parties should be the unquenchable desire to build a robust private sector, and most specifically, small and medium-sized enterprises.
“The AfCFTA is not for government; it is an agreement for the private sector which is mostly comprised of small and medium enterprises, and for that matter, it will be important for private businesses to be at the forefront of taking advantage of the opportunities that it offers,” as aptly stated by Wamkele Mene, Secretary-General of the AfCFTA Secretariat.
He adds: “This is not just a traditional trade agreement; in my view, this is the last chance for Africans to lift ourselves by our bootstraps in every way that we can in both digital platforms, Customs procedure or trade facilitation, we have to make sure that this agreement delivers more than just efficient transit of goods from one border to the other”.
There must also be concerted efforts towards the implementation of an effective competition policy to safeguard the gains of the AfCFTA and to directly influence industrial transformation.
The protocol on competition policy will be one of the key outcomes of the Phase 2 negotiations; an effective competition policy will be critical to ensuring that the gains expected from the continental market and trade liberalization will not be eroded by uncompetitive pricing.”
To Herbert Krapah, a deputy trade and industry minister, the domestic market could only harness the benefits of AfCFTA, and ensure that trade liberalization is not compromised by uncompetitive cross-border trade behaviour, a workable competition protocol will be highly significant.
Our AfCFTA journey must be inclusive: one that pays critical attention women and youth-led businesses as well as informal and rural-based enterprise—who make up the chunk of Ghana’s private sector.
To be able to achieve this, there must be a conscious effort to build a sustainable rural economy that is underpinned by the productivity of small and medium enterprises and the growth of the rural private sector.
Small and medium enterprises and sole-owned businesses at the districts level will have to be given the much-needed support and push as well.
An open and liberalized market is a fertile ground for foreign direct inflows and Ghana’s fertile investment climate and comparative advantage places in good stead to see increased investments across every sphere of the local economy.
Free zones or special economic zones have been key actors in impacting global value chain (GVC) by attracting investment, improving export performance, and creating employment, and it is one area that we can look up to the drive up trade-based investments and inflows.
A special economic zone (SEZ) is an area in a country that is subject to different economic regulations than other regions within the same country. The SEZ economic regulations are considered to be conducive to attract foreign direct investment (FDI).
Reports indicate that since its inception, African Economic Zones have given a significant boost to FDI flows by creating an attractive investment condition and supporting job creation. Most of Africa’s Special Economic Zones are found and well developed in 47 of the 54 economies on
the continent with the highest number in Morocco and Nigeria with the likes of Ghana speedily catching up.
It can be said that in the AfCFTA lies a ray of hope for a nation that is still reeling from the harms of a global pandemic and its brightness will depend on how well we galvanise the right potpourri of state-backed yet private sector-led interventions to explore this huge and prosperous market.