Small, Medium and Large Scale enterprises in the country have been cautioned against complacency four months away from the expected implementation of the Africa Continental Free Trade Agreement (AfCFTA).
The operationalization of the AfCFTA is expected to address the challenges of small fragmented markets in Africa by creating a single market, and also increase the volume of trade within the continent by US$35 billion annually or 52% by 2022.
This offers African businesses with an opportunity to implement forward-looking business decisions to maximize the benefits from the AfCFTA and integrate seamlessly within the regional and global value chains.
But how prepared are local companies to compete within the continent?
Speaking in an interview, Seth Twum-Akwaboah, the CEO of the Association of Ghana Industries (AGI), highlighted the threat associated with any form of complacency. “If companies do not have a strategy that enables them to produce competitively and also export, then they can’t even compete in their local markets. So even though it’s an opportunity it is only when you position yourself well that you can take advantage. If not, you’ll find it very difficult to survive.”
Seth Twum-Akwaboah also added that local firms, while seeking government support should take steps themselves to strengthen their capacity to capture their local markets and export their goods and services.
“For most of our companies we need to support them, but they also need to work hard so they move to the level where they expand, export and capture their local market.”
The projected benefits of the Africa Continental Free Trade Agreement (AfCFTA) are significant. The target market for the AfCFTA is projected to rise from an estimated 1.27 billion to 1.7 billion by 2030, out of which about 600 million will be in the middle class.
In terms of aggregate gross domestic product (GDP), this will range from $2.1 trillion to $3.4 trillion. And in terms of investments and consumer spending, the AfCFTA is expected to attract an estimated $4 trillion.