Ratification of AfCFTA good – Analyst
An Africa Trade expert and Principal Consultant, Frontier Markets, Dode Seidu, has lauded government for ratifying the African Continental Free Trade Area (AfCFTA) which will expand opportunities for the export of the country's products and boost export earnings.
According to him, the ratification of the Agreement would also create opportunities for the export of value-added products by manufacturers and business executives.
Parliament ratified the AfCFTA on Friday, 27 April 2018.
Minister of Trade and Industry, Alan Kyerematen, presented the agreement to Parliament, after which the Speaker, Professor Aaron Mike Oquaye, referred it to the Joint Committee on Trade, Industry and Tourism and Foreign Affairs on the AfCFTA for consideration and report.
Reacting to its ratification in an interview with Class Business, Mr Seidu said “I find this a very good step in the right direction. I think that from experience or from literature, a lot of countries that trade usually formalise the trading relationships, so, this is a good step in that direction.
“So trying to formalise it through an agreement is a step that is necessary. We can really take advantage of this because we are going to have access to big markets so that we can export our goods too.
“The downside is that we are going to experience some loss in tariff revenues which for many African countries is a significant source of income, but on the other side however, we can also get revenue through indirect taxes like VAT and through import and exports.”
The AfCFTA is a trade agreement among 44 African Union (AU) member states, with the goal of creating a single market and later be followed by free movement and a single currency union.
It was signed in Kigali, Rwanda on March 21, 2018.
But signing the agreement does not yet establish the AfCFTA. It is expected to function as an umbrella to which protocols and annexes will be added. Once all documents are concluded and ratified by at least 22 states, the free trade area would have formally come into existence.