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The continent has a month into the implementation of the African Continental Free Trade Agreement (AfCFTA).
Who are the winners and the losers, and how to minimize the risks of the single market? This is the question many domestic and foreign investors are asking themselves.
Already, the African single market can boast of the finalization of some of the protocols, the operationalization of the bill as well as the direct trading activities of some Ghanaian industries like Kasapreko in the ports.
Speaking to Charles Ayitey on Business Live on Joy News, founder and CEO of EBII Group, Adjoa Adjei-Twum, called for easier access to financial instruments and other financing instruments for small industries.
“These small industries represent 70 to 80% of businesses on the continent. They need to be easily exposed to credit pathways that will help them grow and profit from this AfCFTA, ”she said.
Meanwhile, Ghana Industries Association CEO Seth Twum Akwaboah called on Ghanaian authorities to deepen the creation of an enabling environment for the development of local industries. He warns that any delay in this appeal will literally let Ghana “sell its market” to other counterparts – “making us the losers”.
Even as the Single Market Agreement has started, truly innovative approaches are needed to meet the financing needs, beyond the usual method of obtaining loans from multilateral financial institutions. There has been a proposal for the formation of a continental public-private partnership, in which African companies that will benefit from the expansion of trade under the AfCFTA would be major financiers.
Not only are the vast majority of African businesses locally based small and medium-sized enterprises, there is also a dire lack of profitable infrastructure to bring goods and services to market at competitive prices.
Industry players, including the international trade community, have insisted that education on the application of trade barriers as part of the agreement, as specified in the AfCFTA rules of origin in the area duty-free trade – which will determine the eligibility or not of goods to be traded – has not been done enough to allow the trading community to keep abreast of the relevant principles of the impending agreement.
Although the implementation of certain operational aspects of the African Continental Free Trade Area (AfCFTA) has been temporarily suspended, the agreement would be a very important element in supporting the post-pandemic recovery and fostering economic growth in the medium term. in sub-Saharan Africa. through the creation of larger and more integrated markets and the promotion of intra-continental trade.
Importantly, the implementation of the AfCFTA will also reduce uncertainty in trade relations within the continent, which, combined with a larger and more integrated market, would promote domestic and foreign direct investment and help boost domestic and foreign direct investment. economic activity as countries emerge from the pandemic.
Prospects for intra-African growth
The International Monetary Fund, in its staff discussion notes released on May 13, 2020, predicts that, although the implementation of some operational aspects of the African Continental Free Trade Area (AfCFTA) has been temporarily suspended, the Agreement would be a very important element in sustaining pandemic recovery and fostering medium-term economic growth in sub-Saharan Africa through the creation of larger and more integrated markets and the promotion of intracontinental trade.
Importantly, the implementation of the AfCFTA will also reduce uncertainty in trade relations within the continent, which, combined with a larger and more integrated market, would promote domestic and foreign direct investment and help boost trade. economic activity as countries emerge from the pandemic.
For the secretary general of the ZLECAf, 2021 marks a new stage in the economic history of Africa’s eco-commercial space.
“Today we are not only celebrating the start of a new year, but we are giving Africa a fresh start, with a free trade area under the AfCFTA,” he said. .
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