Official trading under the African Continental Free Trade Area (AfCFTA) commenced on October 7, 2022. This was after nearly 22 months of preparatory works and a maiden shipment by Kasapreko Company Limited and Ghandour Cosmetics Limited on January 1, 2021.
So far, seven African countries have successfully traded among themselves. The countries, which included Ghana, Cameroon, Kenya, Egypt, Mauritius, Rwanda and Tanzania traded in products like ceramics, palm oil, car batteries and coffee.
This first step set in motion a huge ambition to create the largest free trade area in the world measured by the number of countries participating.
The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.
According to the World Bank, the initiative has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.
Creating a continent-wide market will require a determined effort to reduce all trade costs. African governments will also need to design policies to increase the readiness of their workforces to take advantage of new opportunities.
To take advantage of the initiative, the Government of Ghana (GoG) put in place an institutional framework to help maximise the gains from the AfCFTA.
It includes the establishment of the AfCFTA inter-ministerial committee, national steering committee, and technical working groups on all the seven clusters for boosting intra-Africa trade.
Additionally, it has also designed the AfCFTA Policy Framework and Action Plan as well as the National Export Development Strategy (NEDS) meant to help revitalise the country’s export development efforts with a strong focus on Africa’s over 1.2 billion consumer market.
The action plan launched in August 2022 would provide the needed guidelines for mainstreaming the implementation of the agreement through value-addition to exports, development of capacities to effectively compete with imports and expansion of opportunities for job creation.
The former Minister for Trade and Industry, Mr Alan Kyerematen, in a media interview, indicated that the government had established the key national institutional structures to oversee the implementation of the AfCFTA initiative locally. That, he said, was to help Ghanaian businesses fully participate and explore opportunities under the agreement.
“For Ghana to benefit from the initiative, there is an urgent need to create awareness among regulatory authorities, including the Customs Division of the Ghana Revenue Authority (GRA), economic operators, producers and exporters, as well as the logistical sector,” he added.
Certifications of Origin
Towards achieving the set goals, the government was able to assist 30 Ghanaian firms secure certifications of origin in order to enable them start trading under the AfCFTA.
The certified firms were assisted through the (Ghana) National AfCFTA Coordination Office, which serves as the liaison between Ghana and the AfCFTA Secretariat.
These firms are part of the 230 potential exporters identified to be guided through AfCFTA processes, procedures and protocols as they develop their products to be exported.
A certificate of origin is a document which attests that a product listed has met certain criteria to be considered as originating from a particular country.
It is issued by the Customs Division of the Ghana Revenue Authority (GRA) and the Ghana National Chamber of Commerce and Industry (GNCCI).
The National Coordinator at the (Ghana) National AfCFTA Coordination Office, Dr Fareed Kwasi Arthur, said two out of the 30 firms had been exporting under AfCFTA since October this year.
The two — Benso Oil Palm Plantation Limited and KEDA Ghana Ceramics Company Limited — exported palm oil products to Kenya and ceramics to Cameroon, respectively.
He said the coordination office assisted the companies to meet the necessary protocol for the shipment of their consignments.
Purposeful Policy Intermediation
It is obvious that the opportunities offered will not manifest by themselves, unless through purposeful policy intermediation and active participation by all stakeholders.
As the host country for the AfCFTA secretariat, Ghana is uniquely positioned to become the commercial capital of Africa.
The country must therefore be determined to make the most of the agreement by leveraging on the trade and investment opportunities that the AfCFTA presents.
GoG has already started implementing several programmes that seek to increase economic self-reliance such as; the 10-point industrial transformation agenda, the Small and Medium Enterprise (SME) development initiative, the strategic anchor industries, the One District, One Factory (1D1F) initiative, and the establishment of industrial parks across the country.
These programmes can help facilitate the transformation of the economy and enable Ghana to optimize its benefits from AfCFTA when well structured.
All regulatory agencies and trade institutions under the trade value chain such as the Ghana Export Promotion Authority (GEPA), Ghana Standards Authority, Ghana Shippers’ Authority (GSA) and the Association of Ghana Industries (AGI), have a great responsibility to prepare the country to maximise its gains from the AfCFTA agreement.
A collective approach is required to inject a renewed and fresh hope into trade and industrialisation as these two key areas are necessary preconditions for strong socio-economic recovery.
With the advanced infrastructure connectivity, the AfCFTA initiative presents a great economic trade together with several other social advantages for Africa and her countries like Ghana.
By: Maclean Kwofi