Gov’t bets on ETC guidelines to shore up AfCFTA
“We need to ensure that we build ETC’s across Africa, there is no AfCFTA without export, government of Ghana has a role to play in terms of putting up a regulation to ensure we are able to attract private investments for partnership in setting up these ETC’s, whether is one or medium size, whatever the number is, we need to ensure we are geographically diversed across the country.”
A Deputy Trade and Industry Minister in charge International Trade, Herbert Krapa, has confirmed that government has begun negotiations to develop a regulation aimed at attracting private investments for partnership in setting up the Export Trading Companies (ETCs).
According to him, there is no Africa Continental Free Trade Area (AfCFTA) without export and adds that ETC’s will help lift AfCFTA off the ground.
Speaking to the press at the Afreximbank Export Trading Companies seminar in Accra on Monday, he said, “We need to ensure that we build ETC’s across Africa, there is no AfCFTA without export, government of Ghana has a role to play in terms of putting up a regulation to ensure we are able to attract private investments for partnership in setting up these ETC’s, whether is one or medium size, whatever the number is, we need to ensure we are geographically diversed across the country.”
He also maintained that ETCs will provide market intelligence, information for small medium enterprises(sme’s), manufacturers, others.
AfCFTA, if fully implemented, could raise incomes by 9 percent by 2035 and lift 50 million people out of extreme poverty.
For officials of Afreximbank, the benefits of AfCFTA would be realised to a greater extent if ETCs gains a foothold not only in Ghana but across the continent.
Making a case for the establishment of a legal framework for managing the ETC sector, Olufemi Adebiyi, an SME Specialist and Organisational Strategist indicated that the creation of the “facilitative” regulator -within the legal framework, aligns or adjust national industrial policy to reflect the emergence of ETC’s.
Noting that steps that should be taken include: the state intervention to compensate for inadequacies of capital, skilled labour, entrepreneurship and technological capacity.
He also stated that there was the need to incentivize the ETC programme with various measures comprising fiscal based measures such as tax incentives, preferential certificate of origin, market readiness assistance ; monetary based measures such as guarantees, priority interest rates, grants-in-aid.
For Mr.Adebiyi, smes are predominantly handicapped to undertake commercial export in terms of knowledge, information, capacity/scale, corporate governance, contract sanctity.
However, he notes that ETCs are expected to engage the SMEs in a supply chain relationship with impacts such as improved export behaviour in the short run, growth in the medium term and improved/sustainable productivity in the long run.
ETCs are intended to address the issue of moving from exporting raw materials to industrialised products.
An ETC is a commercially run and profit-orientated organization, investors invest in ETC to promote intra-and extra-African trade and thus contribute to the development of trade and economic growth of Africa.