Intra-Africa trade will improve with AfCFTA – Trade Expert

With Ghana having the Africa Free Trade Continental Area (AfCFTA) centred in the heart of its capital city, it is expected that it will be the major link for businesses in the country to thrive beyond its borders.

According to the Executive Director of the Financial Literacy Foundation in Africa Richmond K Frimpong, even though the major challenge for small scale businesses and manufactures in the country is access to the AfCFTA, they should not be reluctant but leverage the opportunities the trade agreement by AfCFTA poses to them.

“If you are a small business you will see that one of the critical challenges we have is your access to particularly either your manufacturing or maybe a service provider, your access to take advantage of the huge access to these market and leverage on the economies of scale, the challenge you sighted about how to overcome even intra-trade among us as a country. This pact has protocols that give every country that has rectified and signed the pact the opportunity to now open up,” he said.

He urged businesses to be ready to receive investors and have an open mind when doing business because that is the only way to grow.

“Two things play out in this, that is export readiness and investor readiness. Now when we say investor readiness we are simply talking about how prepared you are assuming somebody wants to put in some funding as debt or equity, debt because it is something you are going to pay back over time, equity meaning it is ownership into the business and so he is going to make returns based on the bottom line in terms of profitability. Whichever it is, some capital is coming into the business so that they can leverage on the rule of origin to produce right here and then they can send it through the free trade agreement,” he added.

He further stated that “they will be looking at certain companies that pass the test of their preparedness to receive that kind of funding and that is one of the advantages you have. One of the advantages you have is that now the pact is forcing investors to look down to Africa and particularly for us in Ghana to look directly to Ghana because the administrative head office is here and so then foreign direct investments into MSMD’s is going to increase because everybody would want to bring their production headquarters here so that they can take advantage of the free trade why because if it is originating from here it is produced here then it is allowed to enjoy the free tariffs so then they are exempted somehow and that’s why I am saying you the business must be ready for such.”