SMEs urge government backing to leverage AfCFTA
Small and Mediun-sized Enterprises (SMEs) in the Central Region have implored the government to support and protect local manufacturers and businesses as the springboard to rake in the full benefits of the African Continental Free Trade Area (AfCFTA)
They indicated that SMEs were the foundation of most economies representing about half of the world’s gross domestic product (GDP) and creating 60 to 70 percent of jobs across countries.
Regardless, in developing countries like Ghana, SMEs tend to employ poorer and more vulnerable groups such as youth and women.
For that matter, supporting SMEs they stated was the surest way to ensure inclusive and sustainable growth of the economy to generate the needed revenue for accelerated development.
Mr Philip Assafuah, the Chief Executive Officer for Appeb Cylinder Manufacturing Company Limited at Awutu Bereku appealed on behalf of SMEs at a day’s stakeholders forum to court support for the AfCFTA in Cape Coast.
The forum sought to enable all stakeholders to gain a better understanding of each other’s functions to ensure that Ghanaian businesses participating in AfCFTA are well positioned to harness the benefits of the Free Trade Area.
It was arranged by the Ministry of Trade and Industry through the National AfCFTA Coordinating Office.
Mr Assafuah regretted that many businesses in the country were crippled due to cheap imports, lack of long-term capital, high-interest rates, lack of expertise and diplomatic push.
He said there was no doubt that all great nations had protected and supported indigenous businesses at a point.
Particularly, he said Governments across Europe had shielded, nourished, and granted emerging companies with protection and economic reliefs to ward off competition from non–native competitors.
Citing examples of South Korea to buttress his case, he said through aggressive government support and finance, brands such as Samsung, LG, Hyundai, and SK had become international brands.
In a similar vein, he said the Japanese multinational corporations such as Canon, Sony, Komatsu, Nippon Steel, Panasonic, Toshiba, Hitachi, Sanyo, Sharp, and Mitsubishi were leading brands throughout the world and always on the Fortune 500 list of leading multinationals.
Such entities, he indicated, received enormous support in the form of financing and protection to break into the international markets.
Annually, they had brought hundreds of millions of dollars in taxes and other revenues to their economy for development.
Taking inspiration, he said it was important for the government to provide financing and support for promising Ghanaian businesses to expand and create wealth for the nation.
“The time has come for the government to make conscious efforts in supporting indigenous Ghanaian businesses which have shown the potential to break into international markets, he said.
He also charged SMEs not to allow themselves to be used to exploit the taxpayer but creatively build value to support the local economy.
Responding to the SME’s plea, Dr Fareed Arthur, the National Coordinator for AfCFTA said the free trade area was not about protecting local industries but supporting local companies to compete globally.
Trade liberalization involves removing barriers to trade between different countries and encouraging free trade has created a continent-wide market that would require a determined effort to reduce all trade costs.
Therefore, African governments will also need to design policies to increase the readiness of their workforce to take advantage of new opportunities.
The official trading under the free trade area began on October 7, 2022, after 22 months of preparatory works including putting institutional structures at the secretariat in Accra, Ghana.
The first such trans-border trading was a shipment by Kasapreko Company Limited and Ghandour Cosmetics Limited on January 1, 2021.
The six other countries involved in the trading are; Cameroon, Kenya, Egypt, Mauritius, Rwanda, and Tanzania. Products traded included ceramics, palm oil, car batteries, and coffee.
It put into motion a huge ambition to create the largest free trade area in the world measured by the number of countries participating.
The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.