ITC AfCFTA report sets grounds for gov’t/private sector discussions
The government is preparing to commence a crucial dialogue and partnership with the private sector on various key adjustments needed to be instituted before the implementation of the Africa Continental Free Trade Area (AfCFTA) begins in July 2020.
Apart from devising initiatives to support the private sector, a key agenda for the discussions concerns a report released at the start of this week by the International Trade Center (ICT) on diversifying trade in Africa, and which focuses on the need for African countries to develop a regional strategy due to the degree of overlap of sector priorities at the country and regional level. (See centerspread on pages 12 & 13).
According to the ITC, overlapping sector priorities could become a potential source of tensions during AfCFTA negotiations and thus it is imperative to institute key measures before implementation next year.
Most importantly, neighbouring countries find themselves very often prioritising the same type of agricultural products. Examples include cashew and various foodstuffs being prioritised by Ghana, Benin, Burkina Faso, Mali, Côte d’Ivoire, Gambia as well as countries outside the region such as Tanzania among others.
Despite this potential source of TRADE tensions, the ITC insists that the AfCFTA can provide the opportunity to change the strategic direction of the continent, as the current strategic focus is on a very narrow range of agricultural and primary products.
“A larger focus on innovation and manufacturing might be crucial for the success of the policy. Innovation is seldom featured as a priority in African trade competitiveness strategies, yet it will be important for upgrading and diversification.
“African countries have tended to allocate fewer resources to the implementation of their strategies and also have a lower degree of country ownership. These aspects may have to be addressed for the AfCFTA to be a success”, the report states.
In effect, close to 80 percent of existing trade strategies in Africa identify trade integration and regionalism as crucial policy areas, but currently only 10 percent of African strategies have a regional scope, which indicates there is space for regionalism to grow, ITC asserts.
The report is expected to provide Government the data and insights to make some pivotal policy decisions and establish priority sectors in its quest to support the private sector towards harnessing opportunities and potentials from the integrated single market space.
The impending discussions will be undertaken by the Ministry of Trade and Industry (MoTI), Ministry of Business Development in collaboration with relevant institutions namely Association for Ghana Industries (AGI), Ghana National Chamber of Commerce, Ghana Export Promotion Authority (GEPA) among others.
Although such institutions have been sensitizing the business community about the expected outcomes of the agreement, Government views the impending engagement as a measure to consolidate the previous efforts.
The AfCFTA is part of an emerging trend in Africa over the past 15 years to develop more regional strategies for export competitiveness and development. Against this backdrop, the ITC’s paper assesses Africa’s existing national and regional strategies to identify common thematic and sectoral trends as well as potential sources of tension in the ongoing AfCFTA negotiations.