Be strategic in taking advantage of AfCFTA
Business magnate and Chief Executive Officer (CEO) of McDan Group of Companies, Daniel McKorley, has advised businesses in Ghana and by extension businesses on the continent to be strategic in taking advantage of the African Continental Free Trade Area (AfCFTA) agreement.
Speaking at the 6th Edition of the UPSA-ACCA Africa Trade Roundtable themed Infrastructure, Supply Chain Systems and the AfCFTA on Monday, October 24, 2022, Mr McKorley quipped that, with the offtake of the AfCFTA pact, businesses must not rush to enter other African markets.
In his view, businesses must first study the business terrain of their selected African markets before entering or doing business in the said African market.
According to Mr McKorley, studying the business terrain of an African market before entering it, is necessary given the fact that, business techniques that work in one African country will not necessarily work or be effective in another.
“I would advise businesses to be strategic in trading on the Continent, especially in view of the AfCFTA. Because you see, the techniques that work in Ghana, will not work in Nigeria or Kenya. You can’t use the same techniques because if you do, you will fail,” he averred.
“Before you go into a country to trade, it is extremely important to know the culture of the country, the business environment of the country, the policies that affect business operations in the country, mergers and acquisitions in the country, among other things,” he added.
Speaking further at the event, Mr McKorley noted the timing for the creation and commencement of the AfCFTA is perfect, given rising commodity and food prices – partly due to supply chain difficulties in foreign countries – which is driving upwards inflation and adversely impacting livelihoods of Africans.
With AfCFTA, Mr McKorley says the African Continent can insulate itself from such incidents in the near future.
The AfCFTA which kickstarted January 2021, is the largest single trade bloc in the world with an estimated $3 trillion GDP value and 1.3 billion market (population of Africans).
Under the agreement, AfCFTA members are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country’s level of development or the nature of the products. General long-term objectives include creating a single, liberalised market; reducing barriers to capital and labor to facilitate investment; developing regional infrastructure; and establishing a continental customs union.
The overall aims of AfCFTA are to increase socioeconomic development, reduce poverty, and make Africa more competitive in the global economy.
The United Nations Economic Commission for Africa estimates that AfCFTA will boost intra-African trade by 52 percent by 2022. A report by the World Bank anticipates that AfCFTA could lift 30 million Africans out of extreme poverty, boost the incomes of nearly 70 million people, and generate $450 billion in income by 2035.
On January 13, 2022, AfCFTA took a major step towards its objective with the establishment of the Pan-African Payments and Settlements System (PAPSS), which allows payments among companies operating in Africa to be done in any local currency.
The UPSA Africa Trade Roundtable brings together intra-African trade experts, government officials, international trade and commercial law experts, policy makers and scholars from across the world to discuss the pertinent issues arising out of the implementation of the African Continental Free Trade Area (AfCFTA).
