With the successful implementation of the African Continental Free Trade Area (AfCFTA), Africa’s manufacturing sector is projected to double in size with annual output increasing to $1 trillion by 2025 with subsequent creation of over 14 million jobs.
Per the AfCFTA, competitiveness has become the currency for the transaction in harnessing opportunities “at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources”.
Making true of the statement “finding opportunity is a matter of believing it’s there”, the country’s Spare Parts Dealers Association has called for governmental support to initiate the production of indigenous vehicle parts.
The Co-Chairman of the Association, Clement Boateng, explained production commence with the gradual manufacture of “suspension rubbers, windscreen and wipers. But before we can even venture into that industry, we need support from the government”.
With the transfer of all functions related to the AfCFTA from Addis Ababa, Ethiopia to Accra, Ghana, the country has been tipped to largely benefit from the Agreement and businesses in Ghana have been charged to be hands-on in taking steps to participate and benefit fully.
Local production of vehicle parts, Mr. Boateng reckons will help in the reduction of imported goods from foreign countries, thereby creating more revenue for the industry and the country as a whole.
“This AfCFTA concept is something which is supposed to be within the Africa continent. For instance, it’s not allowed to bring a third party product from Europe to Ghana and ship to Nigeria or Togo to sell. You are supposed to trade the goods that are manufactured within the African continent and I think it’s a good opportunity for the spare parts industry.”
One conduit to success for ratified countries for the AfCFTA implementation and better national ownership will be an alignment to the Agenda 2063.
The purpose of the Agenda 2063 is in creating a “strong, united, and influential global player and partner,” morphing African countries into world’s best performers in global quality of life measures and accelerating inclusive growth, including through industrialization, import substitution, and employment.
Manufacturing industry features quite prominently in the alleviation of poverty. A robust manufacturing industry can provide well-paid jobs for large numbers of low-skilled workers, increase average household incomes, boost domestic demand, stabilize economies against external shocks, and contribute to innovation and diversification.
That notwithstanding, the World Economic Forum in 2018 expatiated the challenges which adversely comes along with the Agreement which includes an increased competitive pressure as “many emerging African markets are traditional economies that rely on farming for employment”.
These small family farms can’t compete with large agri-businesses in high-income African countries such as South Africa, Kenya, Ethiopia, Egypt and Nigeria. As a result, they may lose their farms, leading to high unemployment, crime and poverty.
Also, the tendency of SMEs being clogged as “consumers always prefer cheaper products”, will be replete in the single market.
This, the forum explained, may lead to local producers losing huge sales to foreign suppliers, because the latter can lower the cost of their products by leveraging the reduced tariffs imposed on imported goods.
