Ghana Must Take Advantage of Continental Free Trade Agreement – AGI
The Association of Ghana Industries (AGI) has said Ghana needs to strategically position itself to take advantage of the Continental Free Trade Area Agreement.
Parliament last week ratified the agreement making Ghana the third country to do so after its signing in Rwanda in March.
The UN Economic Commission for Africa (UNECA) has estimated the agreement’s implementation could increase intra-African trade by 52 percent by 2022, compared with trade levels in 2010.
The agreement is set to be signed by all 55 member states of the African Union, bringing together 1.2 billion people with a combined gross domestic product (GDP) of more than $2 trillion.
The draft agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of “sensitive items” to be phased in later.
The agreement will also liberalise services and aims to tackle so-called “non-tariff barriers” which hamper trade between African countries, such as long delays at the border.
Eventually, free movement of people and even a single currency could become part of the free trade area.
Commenting on Parliament’s ratification of the agreement in a Starr Business interview on the sidelines of the first quarter Business Barometer report the CEO of AGI Seth Twum Akwaboah said there must be a well thought out strategy to take advantage of the agreement.
“We need to improve our productive capacity so that as others are exporting into our market, we also export into others’ market,” he told Starr Business’ Fred Dzakpata. “If your environment is not competitive, then you will be at the losing side because all the goods will be shipped into your market whereas you couldn’t.”
The essence of the agreement, he said “is for countries to specialize in certain areas that they have peculiar advantage.”
Thus, he noted if Ghana has advantage in certain areas “we should be able to produce them in large volume and export” as the Ghanaian market in certain sectors will also be taken up by others.
“But as long as we are able to export and generate export revenue, we don’t also mind when others come to our market. The problem comes when you don’t prepare well enough, you don’t develop your productive capacities, you are not able to identify areas where you have competitive advantage and take full advantage of it, when that happens then you became a loser and I think that is what we should guard against it,” he stated.