Private sector cannot compete under AfCFTA – Professor Bokpin

Economist, Professor Godfred Bokpin has expressed worry about the private sector being crowded out from the benefits of the African Continental Free Trade Area (AfCFTA).

This is due to the unfavourable tax regime in the country.

Speaking to Myjoyonline.com, Prof. Bokpin said the high cost of borrowing coupled with some nuisance taxes are having severe impact on Ghanaian businesses intending to trade favourable under the continental programme, compared to their peers.

Speaking to Joy Business, Prof.Bokpin said unless the current tax regime in the country is reviewed, Ghanaian businesses will struggle to compete under the pact.

‘If you look at our tax basket, it is heavily indirect based. All of that contributes to high produc­tion cost of doing business.

“If you put that together with electricity restrictions on the growth drivers of the economy, Ghanaian private sector has to borrow at a rate in excess of 35 per cent…..you can’t compete,” he said.

He pointed out that all these challenges are making it diffi­cult for Ghanaian businesses to compete under AfCFTA.

“So you can see the funda­mentals and can project how that can affect the Ghanaian private sector and the ability to maximise the participation of the AfCFTA. That’s the point that we are talking about.

“As it stands now, we don’t get the clear picture and direc­tion that government wants to create the enabling environment that guarantees private sector leadership,” he added.