AfCFTA expert proposes review of BoG Act to aid finance exports by businesses under trade pact
AfCFTA Consultant and Group Executive Director of the AfCFTA Policy Network (APN) Group of Organisations, Louis Afful, has called on the Bank of Ghana to help finance exports by Ghanaian businesses under the African Continental Free Trade Area (AfCFTA) agreement.
According to him, the BoG Act needs to be reviewed to help the BoG finance exports and ensure that the country takes full advantage of the Continental trade pact.
“We have to change the BoG Act to finance exports under the AfCFTA because Central Banks in other countries are doing so,” he quipped, further asserting that trade finance is a big challenge to businesses in the country.
He made the assertion speaking on the NorvanReports and Ishmael Yamson & Associates X Space Discussion on the topic, “Harnessing the Power of Local for Global Success: Exports from Ghana.”
The Central Bank of Nigeria via its Export Development Fund (EDF) supports non-oil Exports. Financing under the scheme is via the issuance of a N150 billion (GHS 1.5bn) debenture to the Nigerian Export-Import Bank (NEXIM) with the objective of stimulating and increasing funding, especially to Small and Medium Enterprises (SMEs) to broaden Nigeria’s export portfolios.
Speaking further during the X Space, Mr Afful noted that countries under the AfCFTA must focus on the production of goods or services in which they have a comparative advantage to be able to enjoy the many benefits of the trade agreement.
“Countries should consider their comparative advantage under the AfCFTA and produce or supply to other countries that need them. And the best way they can do that is when two or more countries come together and sign bilateral agreements to supply each other with goods or services in which they comparative advantage,” he noted.
Speaking on the performance of non-traditional exports (NTEs) under the AfCFTA for 2023, Mr Afful commended the Ghana Promotion Authority (GEPA) for the effective implementation of its National Export Development Strategy (NEDS) that saw Ghana earn some $3.9bn in NTEs for last year and which further aims to rake in some $25bn in exports revenue by 2029.
Ghana in 2023 earned some $1.77bn from non-traditional exports (NTEs) to various Regional Economic Communities (RECs) on the Continent under the Africa Continental Free Trade Area (AfCFTA) agreement.
Trade data provided by the Ghana Export Promotion Authority (GEPA) in its 2023 NTEs report indicate that the Economic Community of West African States (ECOWAS) dominates the AfCFTA market for NTEs with a substantial share of 94.47%.
The ECOWAS market analysis reveals significant growth in trade, with Burkina Faso emerging as the top consumer, showing an increase to $508m from $425m in the previous year.
Cote d’Ivoire also displayed a notable rise with its consumption jumping from $150m in 2022 to $289m in 2023.
