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New Year School calls for interest rate structure under AfCFTA

BY: Emelia Ennin, Maclean Kwofi & Emmanuel Bruce
New Year School calls for interest rate structure under AfCFTA
Dr Simon-Peter Kafui Aheto, Director, 74th Annual New Year School and Conference, addressing participants during the closing ceremony. Picture: MAXWELL OCLOO

The 2023 Annual New Year School and Conference has ended in Accra with a call on the Ministry of Finance to develop a differential interest rate structure for businesses under the African Continental Free Trade Area (AfCFTA).

Participants in the 74th edition of the conference recommended that the ministry work with the Bank of Ghana on the differential interest rate structure to ensure that small and medium enterprises (SMEs) and other businesses in the agricultural sector, for instance, attract less interest rates from financial institutions.

This was contained in a 20-point communique read by the Director of the school and conference, Dr Simon-Peter Kafui Aheto, at the close of deliberations in Accra yesterday.

The event, which was under the auspices of the School of Continuing and Distance Education, College of Education of the University of Ghana, in collaboration with the National AfCFTA Coordination Office, was on the theme: "Positioning the African market for sustainable economic development through AfCFTA”.

Among issues discussed were how AfCFTA would contribute to the socio-economic growth of Africa, leveraging trade, industry and commerce amid the global economic downturn.

Others were the operationalisation of economic integration of the African continent and AfCFTA expectations in creating a continent that would be a hub for industrial development.

Recommendations

The participants who included policy markers, representatives of private and public sectors, academia, civil society, youth groups, the diplomatic corps, among others, also urged the AfCFTA National Coordination Office (NCO) to partner with financial and technology companies in the region to develop user-friendly and efficient payment systems to make the free trade area safe and attractive.

"This can be achieved by harmonising and leveraging digital financial services interoperability to make payments inclusive," the communique added.

The participants also urged member states to accelerate the process of developing regional common currencies to ensure smooth facilitation of trade and business.

They entreated the government and AfCFTA to work together and create development banks and other special-purpose financial facilities to enhance women’s access to capital at low-interest rates.

Awareness creation

They further called for awareness creation of AfCFTA trade areas, existing trade information repositories and business incubation centres to enable them to access the regional market.

Institutions such as the Food and Drugs Authority (FDA) and the Environmental Protection Agency (EPA) were also called upon to simplify their processes or digitise their systems to reduce the time span for the acquisition of licences.

To ensure effective communication for trade facilitation, the participants proposed AfCFTA works closely with the various stakeholders in the telecommunication sector, including regulators in member countries who must be impressed upon to lower data charges to facilitate trade across the continent.

"Active phone applications embedded with supplier and buyer information should be developed, as this will provide a database for planning and effective engagement within the AfCFTA ecosystem," they added.

They also demanded that robust cyber security systems be built to ensure data protection and safeguarding of payment platforms under AfCFTA.

The participants further urged AfCFTA to engage with academia and industry leaders to develop apprenticeship and internship programmes for the practical training of tertiary graduates and also collaborate with educational institutions to promote research on trade in Africa, regional value chains and market information.

"There should be increased collaboration among member states on the sharing of information that borders on governance, peace and security,” it added.

Member countries were also charged to ratify the Freedom of Movement protocol to ease cross-border trade, production and competitiveness.

"Border control measures should be harmonised and simplified across states and relevant national agencies,” the communique said.