Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE), an entrepreneurial and policy think tank that promotes youth entrepreneurship through research and advocacy, has indicated that for Africa Continental Free Trade Area (AFCFTA) to function effectively, there must be an established sound political and economic system rather than just mere trade liberalization.
The entrepreneurial think tank organisation, explained in a research report that any economic crisis that will emanate in a member country of AFCFTA will spread across other member countries, hence member countries must be ready to suffer the crisis of other members, in addition to their indigenous exigencies.
The report, in siting the European Union as a benchmark for Ghana, noted that in the European Union, the economic success is not evenly distributed among the member countries.
“There are great economic disparities among member countries of the European Union. An implication was drawn that the AFCFTA will not lead to equal or equivalent economic success of the member states. Some countries are likely to be worse off whiles others will be better off under the AFCFTA arrangement,” the report stated.
The report further proposed a centralized ruling political body for AFCFTA alongside the implementation of the ECO currency which is to take off in January 2019.
This it indicated that is necessary to address conflicts that will arise between member states due to intrusion of smuggled goods through weak spots, citing current happenings between Nigeria and Benin.
It was noted that Nigeria’s President, Muhammadu Buhari ordered for the partial closure of his country’s border with Benin last month to curb smuggling of rice and other commodities.
The restriction was imposed by Nigeria to protect her foreign currency reserves by curbing imports. The Nigerian Central Bank has restricted access to dollars for the import of more than 40 items from cement to soap, with the aim of becoming self-sufficient in the production of staples such as rice and promote the consumption of local rice.
On the other hand, Benin imports rice, then passes off the imported rice to Nigeria because there is free trade. Nigeria had fought against the importation of rice since 2014 and it has reduced the importation which stood at about 1.2 million tons, to the barest level, but Benin’s importation of rice from Thailand has also increased by over 50 percent.
This makes the issue of ‘weak spot’ salient in the discussion of the AFCFTA aftermath challenges and how to address them.
“Clearly, these two countries have different policies and objectives. To achieve harmony, nothing but the establishment of a centralized political and economic system is needed. If this advice is not adhered to, there is going to be more conflicts than is to be foreseen,” ACEYE reiterated.
ACEYE is calling the attention of the government of Ghana to some basic elements that must be given the necessary consideration before the flagship initiative takes place.
“There is going to be an increase in immigration into Ghana. It is not going to be only human immigrants that will intrude the country, but foreign businesses will enter the country through the “weak spots” in the AFCFTA and compete with the indigenous businesses and start-ups in the country.” They cautioned.