Why AfCFTA matters to businesses
In July 2019, Ghana was selected ahead of six other countries to host the Secretariat of the African Continental Free Trade Area (AfCFTA). The decision, according to regional leaders, was ‘fitting’, considering Ghana’s significance to commerce in Africa.
With this move, Ghana becomes the headquarters of the game-changing project which will boost intra-African trade by establishing a mutually beneficial trade agreement among member states.
The AfCFTA is projected to eliminate tariffs on 90 per cent of goods produced on the continent, as well as other non-tariff constraints, with the ultimate aim of aggregating African countries to create a single market.
It will connect 1.3 billion people across the 55 African countries with a market size of US$3 trillion to create the largest trade bloc in the world. The AfCFTA will increase intra-Africa trade by 52 per cent, boost Africa’s exports by US$560 billion, and lift an estimated 30 million people out of extreme poverty.
Therefore, being headquarters of such a trade treaty is not merely symbolic; it benefits the country’s economy and its business people in several ways.
6 Potential benefits to businesses in Ghana
1. Elimination of intra-regional trade barriers
The AfCFTA is expected to progressively eliminate tariffs, as well as other non-tariff constraints on intra-African trade, making it easier for businesses in Ghana to trade within the continent, and explore endless opportunities.
2. Easier access to vast regional market
Businesses in Ghana will get easier access to the vast continental market with over 1.3 billion people. Considering that AfCFTA will remove barriers against Ghanaian products, investors can produce in the country and export uninhibitedly across Africa.
3. Security for informal sector
With reduced tariffs, AfCFTA will make it more affordable for informal traders in the country to operate through formal channels, which offer greater security from harassment, robbery and confiscation of goods. It is also anticipated to provide simplified clearing procedure alongside reduced import duties for women traders.
4. Access to cheaper raw materials
Moreover, businesses in Ghana will have access to cheaper raw materials from across Africa, to feed their factories, as well as access to regional and continental value chains.
5. Opportunity to expand to other continental markets
Through the AfCFTA, businesses in Ghana will be well-positioned to tap into other regional export destinations and can use regional markets as stepping stones to expand into overseas markets.
6. Increased chance of securing investments
The AfCFTA, upon full implementation, will boost the chances of Ghanaian enterprises in securing international investments, as local firms will have more negotiating power thanks to access to the sizable African market.
Opportunities across several industries are expected to significantly increase as a result of the AfCFTA. Among them are the manufacturing sector (industrial and machinery). It is projected that the AfCFTA will help diversify Africa’s trade and encourage a move away from extractive commodities, such as oil and minerals.
The trade pact will also boost investment opportunities in the agricultural sector, particularly in the agro-processing sub-sector. Additionally, it will enhance the potential of the services industry across; business services, communication, financial, transport and tourism.
Explore these opportunities in Ghana, and with Ghana
“Ghana is the commercial and trade center of Africa” as concisely put by the General-Secretary of the AfCFTA Secretariat, Wamkele Mene. The country is poised to remain at the pinnacle of the regional business climate, with the advent of the AfCFTA. Therefore, foreign investors seeking to explore the boundaryless opportunities, and reap the optimal benefits of the AfCFTA, should consider investing in Ghana.
To this regard, Ghana’s government and its investment wing – Ghana Investment Promotion Centre (GIPC) – have intensified efforts to assist all businesses, both local and foreign, to set up, and operate seamlessly in the country.
As opined by the CEO of GIPC, Yofi Grant; “come to Ghana, and talk to us. We are the best place to invest in. Ghana is still the land of Opportunities, Openness and Optimism!”