The purpose of the free-trade area is to ensure significant growth of Intra-Africa trade, as well as assisting countries on the continent use trade more effectively as an engine of growth and for sustainable development.
The CFTA will also reduce the vulnerability of the continent to external shocks, and will also enhance the participation of Africa in global trade as a respectable partner, thereby reducing the continent’s dependence on foreign aid and external borrowing.
President Akufo-Addo was speaking at a State Banquet held in his honour by the President of the Republic of Zambia, His Excellency Edgar Lungu, on Tuesday, June 27, 2017, when he made this known.
He noted that for a continent that has made the choice of pursuing integration, Africa has not done much in liberalizing and promoting trade amongst member countries.
“Research has shown that countries or groups of countries with the largest share of world trade are located within regions with the highest share of intra-regional trade. Trade between African nations remains low compared to other parts of the world,” he lamented.
In 2000, intra-continental trade accounted for 10% of Africa’s total trade, and increased marginally to 11% in 2015. Trading amongst members of the European Union, for example, amounted to 70% in 2015. Intra-African trade is still estimated at less than two percent (2%) of global trade.
“With these very low levels of trade and investment co-operation in Africa, we must put in place deliberate measures aimed at expanding trade and business collaborations to improve the prospects for prosperity of our peoples,” he added.
The coming into effect of the CFTA, the President was confident, would bring progress and prosperity to the African peoples.
With Africa’s population of 1.2 billion set to expand to 2 billion people in 20 years, the President stressed that “this means that a genuine continental market in Africa should be in our economic interest, for it will present immense opportunities to bring prosperity to the peoples in our continent with hard work, creativity and enterprise.”
It is for this reason that President Akufo-Addo noted that “we should no longer delay the process of African integration. A functioning, common continental market has to be a very fundamental objective of all the peoples and governments on the continent, an objective that will consolidate the process of structural transformation of our national economies on which we must be engaged.”
Intensify Ghana & Zambia links
President Akufo-Addo, in his remarks, also called for the intensification of the links between Ghanaian and Zambian enterprises.
With Zambia and Ghana recording similar GDP growth rates in 2016, i.e., 3.3% and 3.6% respectively, as a result of high fiscal deficits, low investor confidence, falling commodity prices and low agricultural productivity, President Akufo-Addo explained that the time has come for the two countries to move away from being mere producers and exporters of raw materials.
“There can be no future prosperity for our peoples in the short, medium or long term, if we continue to maintain economic structures dependent on the production and export of raw materials. Unless we industrialise, with the goal of adding significant value to our primary products, we cannot create the necessary numbers of good-paying jobs that will enhance the living standards of the masses of our country,” he said.
To this end, President Akufo-Addo outlined a number of policies he has initiated since assuming office in January 2017, which has shifted the focus of Ghana’s economy from taxation to production.
He also applauded his Zambian counterpart for his recently approved National Development Plan, on the theme “Accelerating development efforts towards vision 2030 without leaving anyone behind”.
The Zambian programme is hinged on the pillars of economic diversification and job creation, reduced poverty and vulnerability, reduced developmental inequalities, enhancing human development, and conducive governance environment for economic diversification, to create a diversified economy for sustained growth and economic development is highly commendable.
“The transformation of our two economies we seek through these measures should make our enterprises and businesses very competitive in Africa, and beyond,” he added.