The Ministry of Trade and Industry (MOTI) is to embark on nationwide sensitisation programme on the proposed Continental Free Trade Agreement (CFTA) for Africa for the next six months, beginning March.
The Director, Multilateral, Regional and Bilateral Trade at the MOTI, Mr Anthony K. Nyame-Baafi, said the programme would include stakeholders’ consultations in the various regional capitals on the CFTA, national consultations and preparation of schedules of specific commitments and tariff concessions and organise a specific Africa Union (AU) business council for private sector operators and other stakeholders (goods and services).
The CFTA is “the flagship project of African Union’s Agenda 2063,” a long-term framework for enhancing an integrated, prosperous and peaceful Africa driven by its own citizens and representing a dynamic force in the international arena.
Speaking at a day’s consultative seminar on the CFTA, jointly organised by Third World Network-Africa (TWN-Africa) and the MoTI, Mr Nyame Baafi explained the CFTA aims to among others create a comprehensive and mutually beneficial single continental market for goods and services.
He noted that with a population of over one billion of the 55 African countries negotiating for an integrated African market, coupled with a combined Gross Domestic Product (GDP) of over US$2 trillion, if enhanced well, will increase the competitiveness of industries in Africa.
“It addresses the challenge of a business operator exporting goods to an African counterpart with an average rate of protection of around 12.4 per cent compared to 8.4 per cent when exporting overseas. Prevent firms from overseas enjoying better terms of trade than African companies in Africa in the absence of bilateral agreements,” he stated.
Intra Africa trade
According to the United Nations Conference on Trade and Development (UNCTAD), Africa’s exports of manufactured products stood at US$105.5 billion in 2014, a rise from US$28.3 billion in 1995.
At the same time, Vietnam’s exports of manufactured products rose astronomically from US$2.3 billion in 1995 to US$107.8 billion by 2014, outpacing the whole of Africa.
The share of intra-Africa trade for the ECOWAS group in total GDP was quiet low with exports at only 2.6 per cent, imports two per cent and trade balance of only about one per cent and ,therefore, was hardly contributing to the overall economic development of the countries.
The UNCTAD further states that the purpose of the CFTA is to increase intra-Africa trade but when there are no products to trade, how can this be done?
For many countries, about 10 intra-exports or imports account for between 70 to 90 per cent of total intra-Africa trade.
Hence, the CFTA should move in parallel with boosting supply capacity to produce more products yet, this is easier said than done because it takes time.
African countries are listing over 200 products that they export or import within Africa.
The United Nations Economic Commission for Africa (UNECA) has projected that a successful implementation of a CFTA could increase intra-African trade by as much as US$35 billion per year or 52 per cent above the baseline by 2022.
Consequently, imports outside the continent could decrease by US$10 billion per year, whereas agricultural and industrial exports would increase by US$ 4 billion (7 per cent) and US$ 21 billion (5 per cent) above the baseline respectively.
Need for African integration
The Coordinator of TWN-Africa, Dr Yao Graham, indicated that the organisation of trade; if beneficial for nations and their people; for regions and their people; or they turn out to be negative; is important because it is part of building a human society.
He said lessons from the World Trade Organisation (WTO) and the Economic Partnership Agreement (EPA) engagements show that any trade liberalisation among unequal countries that lacks sensitivity to making sure that the weak have the possibilities of benefiting from the trade arrangement, is likely to be resisted by those who are losing.
“African integration is a cornerstone of African aspirations. We want our continent to integrate so that Africans can move freely and goods produced by Africans can be circulated across the continent,” he said.
Dr Graham noted that there are existing tensions in cross-border relations on the continent which CFTA must be sensitive to and at the same time promote.
“The CFTA agenda properly considered and implemented will be a great boast to the continent. We need to prod and add value to our products,” he said.
It was to update stakeholders on the status of the CFTA negotiations so far on both process and content agree on follow up mechanism with the MOTI to help shape and influence Ghana’s position on the CFTA. GB