AfCFTA: 73.8% of Ghanaian traders lack understanding of “Goods and Services Protocol”
Approximately 73.8% of micro, small and medium sized enterprises (MSMEs) in the informal sector have little to no understanding of the Goods and Services Protocol created to enhance the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
Some 24.7% of informal MSMEs have a fair understanding of the protocol with as little as 1.48% of MSMEs in the informal sector having expert understanding of the AfCFTA.
For MSMEs in the formal sector, 52% have little to no understanding of the protocol, with 35% and 13% of them respectively having a fair and expert understanding of the protocol.
The above are findings from a study conducted by the AYA Institute for Women, Politics and Media in collaboration with GIZ Ghana, Ghana National Chamber of Commerce and Industry (GNCCI) and the Association of Ghana Industries (AGI).
The findings were disclosed at a stakeholder workshop with women entrepreneurs from the manufacturing, services and retail sectors.
The stakeholder workshop was themed “Making AfCFTA Work for Women-led Businesses in Ghana.”
The AfCFTA Protocol on Trade in Goods aims to boost intra-African merchandise trade through several means with the first being the progressive elimination of tariffs and non-tariff barriers (NTBs).
To realize this, the protocol seeks enhanced efficiency of customs procedures, trade facilitation and transit. It also aims to enhance cooperation on technical barriers to trade and sanitary measures.
The intended result is the development and promotion of regional and continental value chains, and enhanced socioeconomic development, diversification and industrialisation across Africa.
Regarding the AfCFTA Protocol on Trade in Services, it provides a sound basis for capacity development activities for the cross-border provision of services which is expected to result in a continental integration of markets for services and contribute significantly to economic activity, as services make a sizable contribution to gross domestic product (GDP) growth in Africa.
Making a presentation on the study findings and touching on the awareness and knowledge of AfCFTA among firms (MSMEs in the formal sector), Eunice Offei, a member of the Research Team at AYA Institute, noted that a little over 70% of MSMEs in the manufacturing sector are not aware of the trade pact.
Some 55% and 50% of firms in the retail and services sectors respectively, are also unaware about the AfCFTA.
For the informal sector, traders in the plastics and rubber sub-sector have no awareness or knowledge about the AfCFTA, followed by traders in food and tobacco.
Traders in electronics and IT had the highest level of awareness and knowledge about the AfCFTA.
Also touching on the source of awareness of information on AfCFTA, the study revealed that family and friends, the internet, radio and television were the main sources of information on AfCFTA to both informal (traders) and formal businesses (firms) in the country.
The low awareness and knowledge as well as little to no understanding of the protocols of the AfCFTA among MSMEs in the country, calls for a more aggressive approach in the education and sensitisation of MSMEs on the trade pact which is already in operation.
In terms of sector performance, Ghanaian MSMEs are ahead of their counterparts within the home region as well as the ECOWAS regional bloc.
For instance, Ghanaian MSMEs provide 85% of employment and contribute approximately 70% to the country’s GDP.
Notwithstanding these contributions, MSMEs are more burdened with critical challenges of funding, access to reliable power supply and provision of ICT infrastructure to improve business and expand into firms.
