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Business News of Tuesday, 24 August 2021

Source: thebftonline.com

Only 25% of agribusinesses know about AfCFTA

Director-General of NDPC, Dr. Kojo Essiem Mensah Abrampa Director-General of NDPC, Dr. Kojo Essiem Mensah Abrampa

Although the African Continental Free Trade Area (AfCFTA) agreement is the largest free trade area since the establishment of the World Trade Organisation (WTO) and is worth US$3.4trillion, only a few firms in Ghana are aware of the agreement.

For instance, per research conducted by the Ghana Statistical Service (GSS), only 25 percent of (one in four) agribusinesses in Ghana have knowledge of AfCFTA – despite the fact that its headquarters is in Accra.

To help improve awareness on AfCFTA among businesses in Ghana, the National Development Planning Commission (NDPC) in collaboration with the United Nations Development Programme (UNDP) and Ministry of Trade and Industry engaged some Metropolitan, Municipal District Assemblies (MMDAs).

At the event, the Director-General of NDPC, Dr. Kojo Essiem Mensah Abrampa, said to ensure that the benefits of AfCFTA are realized, MMDAs should be involved in its implementation to facilitate the participation of local businesses in it.

It is important to bring the AfCFTA to the local government level and integrate local economies into the regional market, he said.

“This is the time for all districts to leverage on their competitive advantage in order to stay relevant; as manufacturers, we must relook at the goods we produce and enhance them to compete with the global brands,” he added.

For his part, the Economic Advisor at the UNDP Dr. Frederick Mugisha said the successful implementation of AfCFTA will help reduce poverty and inequality in Africa through sustainable structural transformation.

He, therefore, called for more investment in local economies, especially at the District and Municipal Assembly levels to create more efficient regional value chains to enhance competitiveness in the African market.

“The future of AfCFTA is local and calls for more investment so the opportunities can be fully leveraged. This means adding more value to products and repositioning to compete and penetrate the African market,” he added.

GSS

This finding is corroborated by that of the Ghana Statistical Service (GSS) also organized this year, which revealed that about 75 percent of firms in Ghana are not aware of the African Continental Free Trade Area (AfCFTA) agreement.

This was contained in GSS’s latest report, which assessed the impact of COVID-19 on agribusinesses in Ghana.

When firms were asked whether they are aware of the AfCFTA agreement, only 25.6 percent of agribusiness firms across all sectors are aware of the AfCFTA.

Agribusinesses comprise firms in the agriculture sector and those in the industry and service sectors that contribute to the agriculture production value chain.

Relatively, agribusiness firms in the agriculture sector are highest (31.2%) in terms of those not aware of the agreement – followed by those in the industry sector (23.9%), and the services sector with 23.2% percent.

Leverage of AfCFTA by agribusiness firms

Out of the six supports that firms expect from the AfCFTA, the top-three supports needed by the agribusinesses are an increase in information on business opportunities (24.7%), reduction in the cost of credit (20.6%), and removing policy or regulatory bottlenecks (16.3%).

The least support expected was digitization, including improved Internet connectivity of about 5.5 percent.

Agribusinesses play a critical role in the growth and development transitions of a developing country like Ghana. Typically, these comprise business activities that contribute to the food security and nutrition of the population.

Activities of agribusiness include the supply of agricultural inputs, the production and transformation of agricultural products, and their distribution to final consumers.

Notwithstanding their importance, relatively very little is explicitly known on the pandemic’s impact on agribusinesses, due to a lack of data to address the challenges arising from the effects of the pandemic.