The Chief Executive Officer of the Ghana Investment Promotion Center (GIPC), Yoofi Grant has said that unilateral border closures are detrimental to Foreign Direct Investment (FDI) projections as there is a risk of investor hesitations.
He is hopeful that, even though the development is a challenge, the coming into effect of the African Continental Free Trade Area (AfCFTA) presents a major opportunity for the continent to have better trading platforms with clear responsibilities which grants African countries several flexible trading options.
Mr. Grant, speaking at a press conference to announce the FDI performance of the country in 2020 said: “Countries taking unilateral decisions to the detriment of their trading partners are detrimental to everyone else.
In one instance where our big neighbor, [Nigeria] closed its borders unilaterally and stopped the flow of ECOWAS trade, it affected Ghana just like all the other countries who were exporting there. At the end of the day, they were forced to open the borders because the impact was too much on the sub region.
I am excited with the AfCFTA because it creates a big growing market and sometimes you have to work with the problems but it is the opportunity that you try to grab. Ghanaians would be able to export to these markets and the rules are clear. The dos and don’ts when it comes to the country-of-origin rules etc. We plan to do conferences on the AfCFTA so that our people understand what the opportunities are so they take full advantage of it,” he said.
His comment come of the back of Ghana’s petition to the Economic Community of West African States (ECOWAS) over the imposition of a duty regime by the Government of Benin (GoB) targeted at goods from Anglophone West Africa.
The country is of the view that the duty regime, which took effect seven months ago, had presented an unfair advantage to companies operating from Francophone West Africa that still benefited from duty and quota-free on exports in Benin.
Consequently, Ghanaian manufacturers that are into the exports of plastic pipes, paints, aluminium products, cooking oil, among other products have halted exports to the Benin market until further notice.
The affected manufacturers, led by the Ghana National Chamber of Commerce and Industry (GNCCI) reported the situation to the Ministry of Trade and Industry (MoTI) and the Ministry of Foreign Affairs and Regional Integration (MoFARI).
However, after several attempts to solve the issue at country-to-country level failed, the country petitioned the ECOWAS Commission for an immediate solution, multiple sources at both MoTI and MoFARI told the paper on March 5.
Some multinational companies based in the country have expressed grave reservations regarding the development saying the unilateral state decisions are affecting confidence in economic trade agreements on the continent. Some trade experts have also said that the development is derailing investment confidence in the sub-region, because many businesses won’t be sure how their investments will be treated and/or if there is a mechanism to solve issues as quickly as possible.
“Investors, apart from finding economically stable countries to invest in, are also looking at some return on investment. If they invest with the view of exporting to the sub-region and one day a major country says it has closed its borders due to some reasons, what would this mean for their investment?” an analyst told the paper.