The majority of private sector companies in the country have yet to develop a business strategy to gain a competitive advantage from the African Continental Free Trade Area (AfCFTA), nearly 18 months after the start of trading.
A senior partner of AB & David Africa, a law firm, David Ofosu-Dorte, described the situation as worrying and urged the firms not to hesitate to come up with the strategy to enable them to benefit from the initiative. .
Mr. Ofosu-Dorte, who was addressing the Ghana Academy of Arts and Sciences (GAAS) Forum 2022 in Accra last Monday, said that the failure to develop a corporate strategy by companies was not the lack of knowledge of the AfCFTA, but the lack of ability to take advantage of the initiative and see Africa as a great market for their products.
The three-day forum, which has the theme: “African Continental Free Trade Area: Challenges and Prospects”, is held in sessions and is aimed at speakers such as the Head of Trade, Services Division of the AfCFTA , Beatrice Chaytor; the Dean of the Faculty of Law of the University of Professional Studies (UPSA), Professor Ernest Abotsi; Managing Director of Universal Merchant Bank (UMB), Nana Dwemoh Benneh, and Governor of Bank of Ghana (BoG), Dr Ernest Addison.
It is placed under the aegis of the GAAS, in collaboration with the UMB.
Speaking on the topic: African Continental Free Trade Area: Implications for Private Sector Development,” Mr. Ofosu-Dorte said the private sector needs an entrepreneurial mindset to succeed in the initiative.
“The way the private sector thinks and does business itself has to change. Many private sector business owners are happy to say that I am the sole owner of a single business rather than having 10%. 100 shares in a conglomerate of 100 companies.
“Some of these things require a new search for solutions and also a realignment of the national psyche. The success of the AfCFTA will be primarily determined by the collaborations,” he added.
Protocol on Trade in Goods
AfCFTA Trade in Services Division Head Ms. Chaytor explained that under the Protocol on Trade in Goods, there would be an elimination of duties and quantitative restrictions on imports on 90% of all tariff lines over five years for non-least developed countries (LDCs) and 10 years for LDCs.
In addition, seven percent of tariff lines that were considered sensitive products will be phased out after 10 years for non-LDCs and 13 years for LDCs.
She said the application of rules of origin provisions would ensure that small and medium-sized enterprises (SMEs) that used significant African content in their products would see these items qualify as originating products eligible for the AfCFTA preferential trade regime. in terms of raw materials and added value. .
Ms. Chaytor further stated that the provisions of the Sanitary and Phytosanitary Standards Annex entail the harmonization of standards, licensing and certification across the continent to make it easier for SMEs to meet export standards and also to meet regulatory requirements for various markets on the continent.