The African Union, AU has admitted that there will be short-term losses for countries who have signed on to the Africa Continental Free Trade Agreement.
Twenty-four out of the fifty-four African countries have signed and ratified the agreement which came into force yesterday.
Speaking to Joy FM, Commissioner of Trade and Industry for AU, Ambassador Albert M. Muchanga said the loses will be mitigated in the long term.
"In the initial level there are going to be short term losses for countries who signed on to the Africa Continental Free Trade Area but on a long term basis there is going to be long term benefits because it will broaden the tax base so as part of the process we are coming out with........ adjustment mechanism that will be completed in July this year and we intended to have a validation workshop in August i think the question will come after the validation workshop.."
We need to identify products qualified under Continental Free Trade Agreement
The Private Enterprise Federation (PEF) has asked the government, and other stakeholders to speed up discussions to identify which products would be allowed into Ghana from other African countries when the Continental Free Trade Agreement is fully implemented.
Speaking to Citi FM ahead of the implementation of the agreement, President of the PEF, Nana Osei Bonsu said the discussions must be fast-tracked.
“It borders on government revenue, the elimination of tariffs is going to affect government revenue. And if the revenue is not there, the government is going to look at the domestic private sector. We need to identify the items with a 90 percent liberalization with a low impact on government’s revenue. This will reduce the burden of increasing taxes,” Nana Osei Bonsu said.
Continental Free Trade Agreement will negatively affect other sectors of the economy
The implementation of the African Continental Free Trade Agreement (CFTA) this year (2019) is likely to negatively affect other sectors of the Ghanaian economy.
The Continental Free Trade Agreement after its implementation will allow for a single continental market for goods and services with free movement of businesses and investments and also pave way for accelerating the establishment of the Continental Union and the African Customs Union.
The International Monetary Fund (IMF) has warned that Ghana could face revenue shortfalls if the country starts the implementation of the African Continental Free Trade Agreement.
The IMF maintains that although the agreement will boost trade on the continent, it will affect earnings and employment opportunities in some sectors of the economy.
“Our policy message is to try to put the necessary of infrastructure or policies to shelter part of the population that will be affected”, Albert Touna Mama, Country Representative for the IMF noted.
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