Ghana has been given the chance to host the African Continental Free Trade Area (AfCFTA) and therefore will establish a Secretariat in Accra, which was expected to be completed by March 2020.
This development will efectively put Accra as the commercial capital of Africa, a regional trade hub and an economic epic-centre.
It would also serve as the new gateway to the continent and promote Foreign Direct Investments as it helps the country to serve as an attractive investment destination.
Other objectives are for AfCFTA to open up new market access opportunities under preferential terms for Ghanaian producers particularly Small and Medium-sized Enterprises (SMEs) and offer the country an opportunity to host various Regional and Continental meetings associated with the AfCFTA.
AfCFTA is a single market (duty free, quota free) covering the entire African continent with a total population of 1.2 billion and a combined Gross Domestic Product of almost three trillion dollars.
Fifty-four countries out of 55 have signed the AfCFTA and 27 countries have ratified the Agreement.
AfCFTA is the most significant development in Africa since the establishment of the Organisation of African Unity in 1963 and was considered as the flagship project under the World Trade Organisation in terms of the number of member states.
The new agreement is expected to increase intra-African trade through better harmonisation and coordination of trade within the African continent.
It has four key components – the Framework Agreement incorporating the principles, guidelines and modalities for negotiations; the Protocol on Trade in Goods with relevant annexes; the Protocol on Trade in Services with relevant annexes; and the Protocol on Working Rules and Procedures for disputes settlements.
Other three Protocols comprising Investment, Competitive Policy, and Intellectual Property Rights would be concluded in the Second Phase of Negotiations.
“The strategic objectives and benefits of AfCFTA include developing regional value chains and facilitating cross border investments; enhancing access to an expanded market for SMEs in Africa on preferential trade terms; and attracting Foreign Direct Investments into Africa with strong regional and local content.
AfCFTA would also facilitate the integration of Africa economies into global markets; significantly improve the Terms of Trade for African countries; enhance benefits to consumers in Africa through lower prices of goods imported from within Africa; and significantly enhance employment opportunities in Africa particularly for the youth.
It is estimated that intra-African trade would increase by as much as $35billion per annum or 52 per cent by 2022.
The benefits of signing onto AfCFTA would not come automatically, therefore a Programme of Action to Boost Intra-African Trade (BIAT) had been endorsed by AU Heads of States for member states to harness the benefits.
The BIAT would address seven priority clusters of Trade Policy, Trade Facilitation, Productive Capacity (Industrialisation), Trade-related infrastructure (example Transportation and Communication), Trade Finance, Trade Information, and Factor Market Integration.