Ghana ratifies Africa’s big new free trade agreement to unlock opportunities

Ghana on Thursday night ratified the African Continental Free Trade Area (AfCFTA) agreement that will help African countries carry out trade within their borders without restrictions.

Ghana becomes the second country to ratify the agreement after Rwanda.

President Nana Akufo-Addo is expected to give presidential assent to the agreement to complete Ghana’s part of the process.

The agreement creates a single market for goods and services facilitated by the free movement of persons in order to deepen the economic interest of the African continent in accordance with the pan African vision.

It is expected to come into force when the parliaments of at least 22 out of the 55 African countries ratify the agreement.

Ghana’s parliament was recalled from recess Thursday to among other things, consider and ratify the agreement as Ghana lobbies to host the Secretariat for the AfCFTA.

African heads and governments in 2012 agreed to the establishment of a continental free trade but only started negotiations in 2015.

Expected to be signed by all the 55-member states of the African Union, the agreement will bring 1.2 billion people with a combined gross domestic product (GDP) of more than $2 trillion.

Currently, only 44 countries signed have signed the agreement in Kigali on March 21.

One of the continent’s economic powerhouses, Nigeria, failed to sign the framework for the agreement major concerns raised by the country’s labour unions.

The Nigerian government explained the move was “to allow more time for input from Nigerian stakeholders”

The draft agreement commits countries to removing tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased in later.

The agreement will also liberalise services and aims to tackle so-called “non-tariff barriers” which hamper trade between African countries, such as long delays at the border.

This will eventually ensure free movement of people and possibly a single currency could become part of the free trade area.

Ghana eyes AfCFTA Secretariat

Prior to the ratification of the agreement by Parliament Thursday night in Accra, the Parliamentary Select Committee on Trade, Industry and Tourism said an early ratification of the agreement was going to enhance the chances of Ghana being selected to host the AfCFTA Secretariat.

The Committee noted the process leading to the final selection of the host country has already begun and a formal decision on the matter is to be taken at the next summit of the heads of African state and government in July 2018.

It said the social impact of the agreement on the country would be enormous since it will enhance the private sector capacity to create meaningful jobs.