The African Continental Free Trade Area (AFCFTA), a game changer for Ghanaian Businesses
The saying better late than never indeed is true, the birth of Africa Continental Free Trade Area even though a little too late, the initiative is still relevant in growing the economic fortunes of the Africa continent. Some scholars in academia argue that, African would have been far ahead in its socio-economic development agenda, if AFCFTA was conceived earlier than now, perhaps what triggered and made the ratification process easier and faster than anticipated, was the emergence of the deadly COVID19 pandemic.
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The pandemic made Africa countries vulnerable in terms of revenue generation shortfalls, from its long age-old trading partners in Europe, America, and Asia where the pandemic had a huge toll on their economies.
AFCFTA Agreement remains one of the biggest and largest free trade agreement since the World Trade Organisation (WTO) and constitute a prime example of the continent‘s current trend towards economic integration. It has a market of about a 1.2billion people with combined economies of over US $2.5 trillion. A large trade agreement like AFCFTA from its inception already has its own teething problems, however, the enthusiasm that has greeted the AFCFTA as witnessed in its ratification by fifty –four countries in Africa, clearly send signals to all stakeholders that, this is a trade revolution that has come to stay for the benefit of the Africa continent.
Ghana has always been a trailblazer in championing the socio-economic development of Africa. It comes as no surprise that yet again the country has demonstrated its leadership prowess in the establishing of the AFCFTA secretariat in Ghana. This is a feat worth celebrating and commending all leaders who played diverse roles in the realisation of this goal.
However, our celebration should go beyond just being the host country to one, where we can position and build the capacity of businesses in Ghana to benefit from this great initiative.AFCFTA is expected to boost Ghanaian exports , stimulate investments and innovation, foster structural transformation, improve food security, enhance economic growth, and export diversification. These are benefits AFCFTA is presenting to Ghanaian businesses and the continent as a whole. The big question remains what businesses in members’ countries especially Ghana can do to realise the full benefit of the largest single continental trade agreement.
This piece seeks to proffer some practical ideas the private sector and government institutions working in these sectors i.e. Manufacturing, agribusiness, pharmaceutical, and service sectors can collectively apply in their operations towards scaling up productions to meet the demands of the AFCFTA market.
Bold steps must be taken to build a strong network and strategic collaboration among businesses promoting goods and services on the AFCFTA market- Most Ghanaian businesses have a history of performing poorly and failing to compete adequately on any international trade initiative over the years, unhealthy internal competition, poor knowledge and lack of information sharing, and the absence of a coordinated collaborative system, unfortunately accounts for this phenomena over the years.
The success of products and services from Ghanaian businesses to the AFCFTA market, will hinge on strong collaboration and strategic network system that, businesses are willing to build and jointly push together for their mutual benefit.
There is ample data out there, to demonstrate how strong collaboration and strategic network system among businesses in other parts of the world have contributed immensely to their growth and success. Ghanaian businesses will need to look beyond the internal competition and have a second look at the bigger market AFCFTA is offering, businesses must be more than willing to share, commit and cooperate in areas that complement the strengths and weaknesses of one another.
The automobile industry in Europe, America, and Asian is one clear success story of what a strong collaboration and strategic network system can achieve. Collaboration and a strong network among businesses tend to bring about a certain innovation and creativity that drives the growth of the business faster.
Whilst Government is building the infrastructure for the manufacturing, pharmaceutical, agribusiness, and service sector to compete favorably on the AFCFTA market, businesses must also, share and encourage greater collaboration among themselves in areas that will scale up production to meet the demands of consumers on the continental market. Businesses in Ghana must take bold steps to work together towards achieving a common goal on the AFCFTA market.
Businesses must engage the services of experienced consultants to help structure systems that deliver quality products and services on the AFCFTA market.The question of hiring professional consultants to handle a sensitive aspect of the business whilst the organization concentrate on its core activity of production is non–negotiable for businesses in Ghana seeking to make the best of the AFCFTA market. The huge returns (ROI) on investment AFCFTA is offering to businesses require an equal investment in getting professional consultancy services that will help businesses leverage on the opportunities from AFCFTA.
Consultancy services have proven to be very effective especially when such services are centered on best business practices and solutions that help businesses to scale up and deliver products and services to meet international standards.
Businesses in Ghana seeking to benefit from AFCFTA, should look beyond cost, in getting professional consultancy services and rather consider the long term benefits Ghana and the business will derive from the work of consultants in getting practical business solutions that will revolutionize the operations of the business to compete and benefit significantly from the AFCFTA market.
If there is anything we can learn from such trade agreements in other parts of the world, it is their appreciation for the work of consultants in providing critical services that the core business is not able to provide.
It advisable to reach out to experienced consultants from specific countries where businesses in Ghana will be exporting products and services to .The consultants will provide better insight especially for new businesses trying to enter to such markets. Having a better understanding on consumer preferences, taste, demographics and purchasing power of the consumers from the fifty-four countries trading on the AFCFTA market, are all important information consultants can make readily available to businesses, for the purpose of consumer analysis and projections.
Business need to leverage on evolving new technology (Artificial intelligence and Automation) to deliver quality goods and services on the AFCFTA market.
Businesses that will be successful in maximising the full benefits of AFCFTA will depend on how well they able to leverage on new evolving technology to address production challenges that are driven by modern technology .Businesses need to invest heavily in technology infrastructure that can ensure speed and efficiency within and outside the business environment.
This will also require businesses to automate critical aspect of their operations to ensure that the quality of the finishing products and services are next to none on the market .It is common knowledge of how evolving new technology continuous to play a critical role in the industrialisation of Europe, Asian and America. The evidence of the impact new technology is having on the socio-economic development of these continents is there for all to see.
Businesses in Ghana will have to demonstrate their preparedness to derive maxim benefit from AFCFTA through conscious adaptation of innovative technology that can help scale up and drive the operations of the business to ensure greater efficiency. Businesses in Ghana will need to consider the use of artificial intelligence in some its complex operations.
The quality of good and services from manufacturing firms in Ghana seeking to maximise the opportunities from AFCFTA can be achieved through an automated technological framework that leverages new evolving technology to produce goods and provide services that meet the demands of the over 1.2 billion AFCFTA market .
Promote investment in research data for business analysis and strategy formulation .The AFCFTA platform can only be beneficial to businesses in Ghana , when there is a concrete plan to promote research data for business analysis and strategy formulation . The business environment today has become complex and difficult to predict but it becomes easier when there is readily available data from research.
Over the years the bane behind the progress movement of businesses in Ghana have largely hinged on the inability for business to invest in research data for business analysis and strategy formulation .The era were businesses fail because they go blindly into the the market can’t be the case in the 21st century . Businesses that have ready data for the purposes of strategy planning, formulation and implementation are the ones that will achieve maximum benefit from AFCFTA.
It’s therefore crucial that Ghanaian businesses invest in research data, if they want to make great impact with their goods and services on the AFCFTA market. The era where assumptions were made in the planning process is long gone, we are in a period in time, where success in business will be determined by the investment the business is willing to make in research data.
Ghanaian businesses must make the conscious effort to invest and pay attention to research data; this data will become the guiding principle for businesses that will want to make the best out of AFCFTA .This data will provide country specific needs and preference of particular goods and services that are in high demand in member countries.
AFCFTA has come to stay, whether the country Ghana and the business community will maximise the full benefits this single largest trade agreement is offering will depend on, how well Ghanaian businesses can adopt some of these ideas in their strategy planning, formulation, and implementation process. If businesses in Ghana will religiously apply some of the ideas espoused in this article, then they will position themselves to make the best of the AFCFTA market.
Long live AFCFTA!! Long live the Ghanaian Businesses!!
The writer is a business consultant and a partner working with Intelligent Capital Group on a sensitisation campaign for the AFCFTA challenge for SDGs. The writer is a strong advocate for the support and development of Ghanaian businesses to shine on the AFCFTA market.
Author: Van-Ess Alootey.
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