…small companies should constantly engage relevant authorities
Contrary to the position that the African Continental Free Trade Area (AfCFTA) will benefit only large-scale businesses and consequently place small- to medium-sized companies at an economic disadvantage, the trade area will yield dividends for businesses of all capacities, Managing Director of Kasapreko Limited, Richard Adjei, has said.
He expressed firm belief that benefits from the agreement – which seeks to boost intra-African trade by removing existing trade barriers – will accrue to smaller businesses through partnerships among themselves as well as with larger corporations.
Speaking exclusively to the B&FT, as his outfit became the first indigenous company to export its products under the arrangement, he touted the numerous opportunities available and stressed that strategic partnerships will drive efficiency across the board.
“I believe the AFCFTA will be beneficial for many small- to medium-scale companies. For instance, for us at Kasapreko we engage with a lot of smaller companies; we engage with many smallholder farmers, and this in effect makes them a part of the arrangement – because the more we export, the more we do business with persons who might not have the scale to engage directly in export to, say, South Africa.
“Many smaller businesses will partake in it through their interactions with bigger companies; through the bigger companies, we will see people like a small label supplier, a small bottler supplier – who may not have the muscle to export by themselves – do so through their engagements with bigger companies,” he said.
He added that while logistics and the rigours of documentation processes might present a challenge for some players, they are not precluded from direct export and should constantly engage the relevant authorities – who have proven to be willing and capable of providing robust support.
“Exporting companies should endeavour to get relevant information from the Ministry of Trade and Industry, the Ghana Revenue Authority and other institutions, and ensure that the same is done in the receiving countries,” he noted
Decline in cost of production over time
Lauding the level of awareness about AfCFTA in the country, relative to others within the Area, he scored the trade process highly and stated that efficiency will improve as time progresses, which will translate into gains for all stakeholders.
Chief among them, Mr. Adjei argued, will be the consistent decline in cost of operation, particularly the cost of key logistics.
“Logistics cost accounts for one of the highest components in overall cost. You may be buying something from Angola directly to Ghana or from Tanzania, but there aren’t many routes between the countries. The ship may have to go to Europe then come to Ghana. So, we expect some of these issues to be resolved now that trade is going to be more between African countries.
“I expect to see a decrease in the cost of doing business, by as much as 30% within the next two years; and by as much as 50% in the next five years. That will be on the cost-of-doing-business side, especially with logistics.”