Business associations in the country want government to as a matter of urgency re-strategise toward the Africa Continental Free Trade Area Agreement (AfCFTA), if the nation is truly eager to ride on the back of it to accelerate economic growth.
According to the three major business associations – Association of Ghana Industries (AGI), Private Enterprise Federation (PEF) and Ghana National Chamber of Commerce and Industry (GNCCI) – government must come up with a strategy to better the fortunes of local businesses in the early days of the AfCFTA, or have to risk investing more to catch up in the future.
They are calling for a deliberate push of investment into products and firms in which the nation has a competitive advantage on the continent. They want this to be used as a catalyst to secure a portion of the market and ride on its back to steadily build other products and firms with high potential to do well on the continent.
Since the beginning of trading in January this year, the nation’s AfCFTA prospects are not far from bleak as only two firms – Kasapreko Company Limited and Ghandour Cosmetics – have been able to ship consignments to other African countries via the AfCFTA platform amid several challenges.
The business associations fear that if something is not done early, the nation might not only lose out but will have its market flooded with goods from other African countries – thereby throwing its local enterprises out of business.
Their fears have been exacerbated with a recent report commissioned by Business Sector Advocacy Challenge Fund (BUSAC Fund) and conducted by consultants from research and advisory firm Konfidants, which has revealed that the nation’s internal and external competitiveness within the AfCFTA is not encouraging, to say the least.
The Association of Ghana Industries (AGI) is proposing the documentation of a Strategy Development (SD) for the AfCFTA that will be followed through keenly in the short-, medium- and long-term. The AGI wants identification of products in which the country has a good competitive advantage, not only for export but also to protect the local market from influxes by other countries.
They also want the identification of companies that are producing the said products – and even companies with the potential to produce these competitive products. Finally, they want government to come up with a clear intervention, as required, to build capacity of the companies to help them export their products through the AfCFTA.
“We at the AGI already have the study, and if government approaches us we will gladly help. When we give the names, then we go to the companies and ask them about the interventions they will need and help to implement them. When we do this immediately, we are capturing part of the market,” CEO of the AGI, Seth Twum Akwaboah, told the B&FT in an interview.
He indicated that while at it, there should be a conscious effort to identify more markets in West Africa and other parts of the continent which can be taken advantage of and work at pushing goods there. He added that a great effort is also needed to fix some business environment challenges – including cost of power, access to and cost of funds, and local supply of raw material to industries.
On the part of the Ghana National Chamber of Commerce and Industry (GNCCI), the report has clearly shown the way to turn around the AfCFTA ill-fortunes the country is faced with; and it behoves all economic stakeholders, especially government, to make the difference. Speaking to the media, Chief Executive Officer of the GNCCI, Mark Badu-Aboagye, said government must push state bodies to put in some more infrastructure that will enhance the competitiveness of local firms.
“We have been told in the report about the cost of funding, power, market access etc. What we have to do is ensure that state bodies in charge of these begin to work on making the nation competitive among its peers on the continent.
“The Electricity Company of Ghana (ECG) must tell us what needs to be done to reduce the cost of power to industry, and government must help them achieve it. The Bank of Ghana must do more on the cost of funds in the country, which we know is very high; and the nation is also uncompetitive when it comes to access to funds. Again, what is the Ministry of Finance doing to ensure that businesses get access to funds and government does not crowd them out of the financial setup?”
The Private Enterprise Federation (PEF) is of the view that businesses, especially Micro, Small, Medium Enterprises (MSME), must move and learn to acquire knowledge on the AfCFTA while modelling their enterprises to benefit from it.
Its Chief Executive Officer, Nana Osei-Bonsu, advised that: “The business community should not sit idly waiting on government for everything, but must inform themselves adequately on what it takes to trade so as to increase their participation as well as increase the volume of trade”.
He also said the MSMEs must join other business associations to learn and also be partners to boost their strength, adding that some enterprises go solo and fail because they don’t have enough manpower and resources.