Noel Tagoe, a former Oxford University professor, has disclosed that Ghana must develop its transportation infrastructure to facilitate trading activities.
According to him, the apt physical location of the country makes it a strong beneficiary of the African Continental Free Trade Agreement (AfCFTA).
Mr. Tagoe, thus, is urging the indigenous banking industry to collaborate with other African countries in order to fully benefit from the free trade.
“You cannot import and export without transportation infrastructure. So, for those of us who are at the coast; we need very good ports to be able to handle big projects. Ensuring that ports work very well is important. Therefore, those who are inland [landlocked countries] need other means of carrying freight such as rail, road or air infrastructure – these are pretty costly – there should be an air agreement over Africa”.
Regulations guiding the AfCFTA trade
Touching on the rules governing the free trade, Professor Tagoe explained that Ghana is putting laws and policies in place to regulate trading activities. He further appealed to other ratified African countries to strive to achieve same.
“I think we started at a very good place because the law must be based on policy; so the policies state what the objectives are and the law should bring the objectives to being. Every country has to put in place laws that will align with the continental free trade.
“There are dispute mechanisms that have been put in place at the continental level and that should help them [member countries] deal with it. I think Africa has had some experience with these things because we’ve had regional economic communities such as ECOWAS”.
Transportation services within Africa
According to the United Nations Conference on Trade and Development (UNCTAD), African countries need to increase their current marginal share in global exports.
It revealed that increasing African exports will contribute to economies of scale, create decent jobs, and improve productivity. However, this will require significant investment in productive capacity and has significant political implications.
Additionally, UNCTAD suggests that AfCFTA should not be constrained by infrastructure deficits and the fragmentation of supply chains.
For that to achieved, it revealed that vast infrastructure gap in Africa, including transport and utilities infrastructure, must be urgently addressed. This will help not to restrict increased trade integration.
Currently, African countries are not sufficiently investing in connectivity and infrastructure, which significantly hampers regional trade. To reverse this pattern, UNCTAD disclosed that a massive and strategic investment in connectivity and infrastructure is essential.
According to UNCTAD, the undercapitalisation of Africa’s development banks accounts for inadequate investment in infrastructure and connectivity of SMEs.
To rectify this challenge, it suggested African governments must be serious about financing the regional infrastructure and SME investment.
“There is no universal recipe for industrialisation. African countries need to design their own economic development strategy and industrial policy that fits their unique circumstances”.