Small and Medium Enterprises (SMEs) operating in the country have been admonished adjust their operations to be able to take advantage of the African Continental Free Trade Area (AfCFTA) to market their products and be competitive in the global market by Mr. Carlos Ahenkorah, Deputy Minister of Trade and Industry.
Ghana in March 2018, signed the agreement and subsequently passed by Parliament fortnight ago, currently awaiting Presidential Assent.
It is envisaged that, this trade agreement will boost economic growth through trade across the continent.
However, the Association of Ghana Industries (AGI) has called on the government to expedite action on trade facilitation reforms and support local industry to improve standards and local production for export.
It said, the multiple intermediaries within the port clearance system such as West Blue Consulting, GCNet, GRA, UNIPASS, EasyPASS among others defeat the trade facilitation efforts.
In a recent statement signed by Dr Yaw Adu Gyamfi, President of AGI, the association pointed out that currently the Economic Partnership Agreement (EPA) and the Africa Continental Free Trade Area (AfCFTA) agreement further open up Ghana’s market to Europe and the rest of Africa under the duty free, quota free regime.
“Considering the impact on Ghana’s revenue prospects, it is expedient for government to give local industries the needed support such as stimulus packages in order to give meaning to these trade agreements that usher Ghana into the single African market.”
The AGI also urged government to, as a matter of urgency, implement the One District, One Factory, adding that businesses were anxious to see support from government.
AGI further noted that manufacturing, which represents a critical mass of the real sector of the Ghanaian economy, is becoming less competitive.
“The collaboration between AGI and the Customs Division of the GRA must be further strengthened to help check malpractices such as under-invoicing, under-declaration and mis-description of imports in order to save manufacturing from the threat of collapse. Delays and charging of unofficial fees still persist, undermining trade facilitation programmes and reforms introduced last year. The paperless system is a welcome initiative, though it has not fully addressed all the challenges. To this end, AGI appreciates the discussions and institutional collaboration with the GRA and relevant institutions to help check malpractices at the ports.”
AGI also called for the passage of the local content law for the construction sector.
“AGI recommends a form of credit certificate to offset outstanding statutory payments to local contractors. There is also the need for a legislation to cushion contractors, who suffer delayed payments in view of the huge pre-financing costs.
“Considering the delayed payments that characterize the sector, such a move will enhance the sustainability of local construction firms, in particular, job creation and economic growth.”
The AfCFTA deal was signed by representatives of 44 of the 55 African Union member states after its formal launch in Kigali, Rwanda, at an Extraordinary Session of the Assembly of Heads of State and Government of the African Union recently.
According to Mr. Ahenkorah, the agreement is the largest free trade area created since the formation of the World Trade Organisation, urging Ghanaian businesses to maximize the full benefit of the agreement for economic growth.
Mr. Ahenkorah gave the advice last week at a Small and Medium Enterprise (SME) Breakfast Meeting in Accra organized by the SME Ghana Awards and Vodafone Business Solutions.
The event was on the theme: “Advancing the Continental Free Trade Agreement: The Role of Value Chain Actors in Ghana”.
The forum was part of the 5th anniversary of the SME Ghana Awards established to motivate and reward the achievements of businesses across the various sectors and individuals of entrepreneurial excellence.
The Deputy Minister stressed that the agreement, targeted at creating a single continental market for goods and services, would open up the over one billion African market to Ghanaian businesses.
He noted that the agreement once established will commit countries to remove tariffs on 90 percent of goods, with 10 percent of “sensitive items” to be phased in later, and as well liberalize trade in services.
He was of the view that an increase in trade was the surest way to develop successful relations between African countries, translating into a rapid increase in exchanges of agricultural, financial, industrial, scientific and technological products, for economic prosperity.
Mr. Patrick Fiscian, the Managing Director, Heritage Bank advised SMEs to engage the services of professionals to develop a business plan for their organization, since it helps to define their vision, mission, and objective for growth and sustenance.
He said the Bank was committed to supporting SMEs to grow their businesses and tasked them to take advantage of the free market trade to maximize its benefits.
Mr. Jerry John Kai Quarshie, Head of SME Ghana Telecommunications Company Limited, said their outfit was ready to support any efforts by SMEs to expand beyond the borders of the country to be internationally competitive.
He urged SMEs to take advantage of the digital world and make good use of social media to advertise their services since its one of the cost-effective channel to sell their products globally.
Ghanaian businesses have lauded the signing of the agreement and pledged their support to implement the Free Trade policy to the benefit of all and sundry.
According to them, the agreement would bring about enhanced market opportunities, legal certainty and predictability for service suppliers to enter and operate in another party’s market.