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Benefits under AfCFTA meaningless without local incentives

AfCFTA   Trade House Without local incentives, small scale businesses would still be disadvantaged under AFCFTA

Tue, 28 Sep 2021 Source: thebftonline.com

It is crucial for the government to provide the required incentives to allow local and small processors to enable them to enter and trade in the African Continental Free Trade Area, Head of Agricultural Trade and Value Chains at AfCFTA Secretariat, Dr Komla Bissi has said.

He said it is incoherent to push for opportunities under AfCFTA when the government does not give incentives to local and artisanal processors to be able to take advantage of the regional market.

“Without local incentives, small-scale producers would still be disadvantaged despite the benefits of AfCFTA. For us at the secretariat, cocoa is a major priority and the emphasis is on value addition,” Dr Bissi told the B&FT at the 2nd African Cocoa and Chocolate Expo (ACCE) in Accra.

There are currently no tax incentives for artisanal cocoa processors who export to other countries in the sub-region.

But the AfCFTA, according to Dr Bissi, is considering the implementation of a zero-tariff driven cost on the export of value-added cocoa products from Ghana to the Africa regional market.

The Secretariat noted that most trade arrangements under the AfCFTA have begun in earnest with enormous emphasis on the need for member states to pursue industrial development approach, to help strengthen the campaign for value addition of which cocoa is part.

The organization has therefore been holding series of internal consultations with COCOBOD to understand some of the interventions that can be given to leverage and meet demands for value addition to enable local cocoa processors to trade in the regional market.

“The Secretariat has received favourable offers in respect to tariffs that would enable artisanal cocoa processors to export cocoa products with very minimal if not at zero tariffs into the regional market,” Dr. Bissi emphasized.

The AfCFTA, he noted, would also in the coming months, engage various stakeholders through key regulators to explain how to get a better understanding of the regional market and what AfCTA requires, including opportunities on market access for value-added products.

Meanwhile, the AfCFTA has expressed worry about how long it had taken Ghana to stir the conversation on the need for large-scale value addition to cocoa.

For long, Ghana’s cocoa output continues to mismatch processing capacities as global processors continuously make billions of dollars from value addition.

Data from COCOBOD has indicated that the processing of the commodity from its raw form into other value-added products has only increased from 23 to 34 percent.

Meanwhile, the global chocolate market is expected to grow from US$138.5 billion in 2020 and reach US$200.4 billion by 2028.

Ghana controls 20 percent of global cocoa production, whiles Ivory Coast cultivates 40 percent of the commodity.

But Dr. Kissi suggests that it is ideal for government to provide the required policy incentives that allow the small processor to be able to sell in the regional market.

Source: thebftonline.com
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