Skip to content

AU Continental Free Trade Agreement- What Ghana Stands To Gain

Forty Four African heads of state and government officials on March 21 2018, signed the framework to establish the African Continental Free Trade Agreement (AfCFTA). The AfCFTA is an agreement advanced by the African Union (AU) that will create the largest free trade area in the world and is one of the flagship projects of the AU Agenda 2063, which is a long-term development program urging for closer African integration by facilitating the flow of goods and people throughout the continent.

It is believed that the AfCFTA if fully implemented, could increase intra-African trade significantly and promote structural transformation by providing a lever to industrial development in African economies. However, is Ghana ready to compete in a single continental market with other African countries?

According to The Washington Post, by 2030, Africa may emerge as a $2.5 trillion potential market for household consumption and $4.2 trillion for business-to-business consumption. The treaty would result in a unified market of over 1. 2 billion people, with a combined gross product of over US$3 trillion the African Union have stated.

Creating one African market will prioritize goods and services invariably leading to the creation of job opportunities.

What Ghana Stands To Gain

So what does Ghana stand to gain from the AfCFTA? Some of the benefits Ghana will derive from a free trade market include:

  • A variety of goods and services
  • Huge market outlet
  • Reduction of market fluctuations
  • Huge job opportunities resulting from the market boom

A free trade agreement will also increase Africa’s competitiveness and boost Ghana’s manufacturing sector. It is expected to spur economic growth in Ghana, boost industrialization, and improve infrastructure development and business diversification. The Ministry of Trade and Industry (MOTI) will be the institution responsible for the implementation of the AFCFTA in Ghana. This week, the Ghanaian Parliament has recalled members for an emergency sitting to deliberate over the AFCFTA to for possible rectification.

It will be an enabler to attract foreign direct investment (FDI) into Ghana and the continent as a whole. Ghana has much to gain from the AfCFTA as it might help wean Africa off foreign aid; an initiative that His Excellency Nana Akufo-Addo strongly advocates for in his ‘Ghana Beyond Aid’ campaign.

Source: GIPC Corporate Affairs