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Consolidating AFCFTA – Institutons must live up to expectation

Customs Ceps Customs Excise and Preventive Service

Wed, 14 Jul 2021 Source: Joe Effah-Nkyi

It is an irrefutable fact that one of the key essences of strategically putting in place AFCFTA is to ensure Africa becomes a formidable force and highly competitive among the many existing global trading blocs within the international trading space.

It is significant to note that for AFCFTA to live up to the perceived expectations amply requires prudent harmonization and processes of services, the swift and prompt movement of international logistics, which of course, encompasses humanitarian logistics across the many frontiers of the African continent and beyond.

In Ghana, there is, therefore, the need for state institutions, to be highly circumspect and critical in the handling of transactional trade issues with much regards to documentations, applicability to policy dimensions, and its effective procedural processes if AFCFTA is to enjoy the much-anticipated exponential growth, which would absolutely inure to the collective benefit of the entire African continent.

In juxtaposing the above postulations to the operationalization of many state institutions in Ghana, but more specifically the Customs Division of GRA, which plays a greater role in Ghana’s trade and revenue mobilization sector, there are a plethora of inconsistencies that call for strict decision-making processes by the authorities to relatively guarantee AFCFTA’s gradual socio-economic development.

With the re-opening of Tema Port MPS Terminal 3, which was subsequently succeeded by the institutionalization of AFCFTA secretariat in Ghana, the vice-president Dr. Mahammadu Bawumiah emphasized the need for approximately 90% of containerized cargo to exit the port without necessarily devanning, of course, after such container had successfully undergone scanning process to determine any possible abnormality.

This positive policy directive was to ensure decongestion and additionally promote a good business climate to attract FDI and besides to improve upon the country’s international transit trade regime, thereby, with the hope of giving much impetus to the concept and ultimate establishment of AFCFTA. Consequently, for inexplicable reasons, this optimistic directive did not live to see the light of day.

In recent times, an increase in the new freight rate applicable to imports of containerized stowage has been ratified by CEPS; this explains that the freight charge component of CIF has been uplifted; therefore, the final duty/taxes amount that a consignee is required to pay would be much higher than the normal projected estimate of prospective importers.

Exchange rate factoe

The above notwithstanding, it is evident that over the years, it has become an established norm of individual shipping lines operating in the country including ‘almighty’ CEPS to quote and apply different rates of exchange in the calculation of duty/taxes elements, import local invoices and subsequent demurrage charges without recourse to the Bank of Ghana’s weekly exchange rate review. The challenge here is that such infringements could definitely scare away potential investors, thereby, influencing negatively on the growth of AFCFTA.

Certainly, in evaluating the above postulations, there is every evidence that the very purpose of the conception of AFCFTA is likely to be defeated due to the palpable fact that a chunk of feasible incoming investment into the country and for that matter, Africa would result in total illusion owing to such violation of policy.

Now, analyzing these inconsistencies, how do we expect AFCFTA to metamorphose into a massive global economic ‘cash cow’ in the face of such ‘killing’ policies? How do we hope to attract the desirable investments?

Indeed, currently, the maritime business community has overwhelmingly been hit with the challenges of overly escalated Shipping line charges, almost double of what was paid in previous years.

These unfortunate courses of action are gradually subjecting many businesses to virtual collapse in an era where the central government is frantically embarking upon strategies to attract investments in diverse modes. In this connection, it is quite obvious that the above unfortunate incidence are likely to contribute to disruptions of the country’s trade policies and projections, which, per the originating negative effects, could ultimately spell socio-economic doom for the state and consequently interfere with the anticipated generation of revenue injections and collective growth of AFCFTA.

Ultimately, there is the need for African Governments to show commitment by making the necessary interventions to right the wrongs emanating from these institutions as rightly posited in this write-up to ensure state institutions operate within the ambit of guiding principles if AFCFTA would live up to be highly competitive among the many ingenious global trading blocs.

Columnist: Joe Effah-Nkyi