Wednesday, 28 October 2020

AfCFTA implementation: single currency for the continent discussion imminent


 Adnan Adams Mohammed

 As the Africa Continental Free Trade Area (AfCFTA) implementation is being geared into full motion, one of the biggest challenges to the success of the free trade area global is Africa’s numerous currencies.

Currently, Africa counts over 40 different currencies used by the 54 nations. Major stakeholders see this as a major threat to the success of the program as it has been in the case of a similar sub-regional (ECOWAS and others) common trade facilitation failures. 

AfCFTA secretariat has disclosed that, the free trade facilitation among African countries will start in January 2021 as its budget has been approved for the secretariat operations. This means, starting next year, trans-border traders within the African continent will start enjoying better, relaxed and reduced trade tariffs, transit cargo regulations and customs and trade impasse settlement.

The AfCFTA has a wide range of instruments and has put in place a robust and comprehensive trade regime that facilitates trade through simplified and digitized documents and procedures, ensures benefit for small to medium scale enterprises (SMEs) and by prioritizing the products they trade for interventions and liberalization. But, the President of the host country of the AfCFTA secretariat sees the numerous currencies as one of the biggest barriers to the effective implementation of the AfCFTA and the development of the continent.

 


President Nana Addo Dankwa Akufo-Addo has said Africa playing host to several currencies impedes the effective implementation of the Africa Continental Free Trade Area (AfCFTA).

 

He made this known in a speech read on his behalf by the Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, at the second mid-year coordination meeting of the AU Financial Institutions, in Addis Ababa, Ethiopia.

 “Africa has more than 40 currencies, which are characterised by frequent volatility, illiquidity and rarely traded status on the global financial market, which makes trading among African countries difficult”, H.E Nana Akufo-Addo said in a speech read on his behalf at the second mid-year coordination meeting of the AU Financial Institutions in Addis Ababa, last week.

 

“Akufo-Addo believes a single currency market will aid in the smooth running of the AfCFTA”, the speech read by the Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey noted.

 

Already, Ghana’s Minister for Trade and Industry, Alan Kyerematen has given assurances that given the structures in place, Ghana is ready to take advantage of the Free Trade Area.

 

According to him, the government of Ghana has rolled out the necessary structures capable of facilitating the take-off in January next year.

 

“I say we are ready on two grounds. First, we have introduced institutional frameworks that makes us ready and I believe you recall that the President has introduced an inter-ministerial facilitation team made up of critical sector ministers who are supposed to provide strategic guidance and support to make Ghana ready for the AfCFTA. There is a national steering committee that is coordinating and guiding the support that will be given to the private companies and other stakeholders.”

 

A national AfCFTA coordinating office has already been established by the host country (Ghana) to coordinate the activities of the block in the country. In addition, he said seven technical working groups have also been established to examine details required to make sure that the policy is supportive and provides assistance to the benefit of private companies in the country.

 

Speaking at the closing ceremony a 2 day National Conference on the Implementation of the African Continental Free Trade Area (AfCFTA) in Accra under the theme “Empowering Ghanaian Businesses to Harness the Benefits of the African Continental Free Trade Agreement under the Framework of the National Export Development Strategy (NED)”, the Minister noted that the increasing intra-African trade would lead to the rapid increase in the exchange of agricultural, industrial, financial, scientific and technological products, which would significantly enhance Ghana’s economic fortunes, create profit for Ghanaian businesses and provide opportunities for employment for the youth.

 

President of the Association of Ghana Industries (AGI), Dr Yaw Adu Gyamfi expressed the readiness of industries under the association in utilizing the opportunities presented by the AfCFTA. He described the citing of the AfCFTA Secretariat here in Ghana as a huge opportunity for Ghanaian businesses to leverage on the production of goods and services for export. He encouraged industries to strategize well and invest in building their export capacity.

 

The Chief Executive Officer of the Private Enterprise Federation (PEF), Nana Osei Bonsu called on manufacturers to be more innovative and concentrate on adding value to the country's raw material base in order to generate more foreign exchange. He urged the private sector to work in close collaboration with the government to identify trading opportunities.

 

The Secretary-General of Trade Union Congress (TUC) Dr Anthony Yaw Baah expressed lauded government for negotiating this agreement. He however encouraged collaboration between key stakeholders to ensure that Ghana benefits fully from the implementation of the AfCFTA.

 

The AfCFTA makes Africa the largest free trade area in the world with a population of 1.2 billion people and a total Gross Domestic Product (GDP) of more than US$3.4 trillion. It aims at creating a single continental market for goods and services with free movement of business persons and investments thus promoting intra-continental trade.

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