Appiah Kusi Adomako, the West African Regional Director of CUTS International, has emphasized the importance of collaboration and partnerships among Ghanaian SMEs to alleviate the expenses associated with exporting and trading within the African Continental Free Trade Area (AfCFTA).
Addressing a Public-Private Dialogue organized by CUTS International Accra, with support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), under the theme “Making logistics work for Ghanaian SMEs to trade under the African Continental Free Trade Area,” Adomako highlighted the logistical hurdles faced by Ghanaian SMEs in trading. These challenges encompass high freight costs, poor road conditions, and the absence of rail infrastructure across the continent.
This, according to him, makes it almost impossible for SMEs to trade under the AfCFTA. “SMEs who deal in the same goods should consider coming together, so they can save cost of production and export under the AfCFTA” he added.
He further reiterated the importance of stakeholder collaboration to address the issue of trade logistics. “AfCFTA will not become successful if we do not address the issue of trade logistics, but this is something that the Government alone cannot do; it involves the private sector too. We need to decolonize trade logistics and Africans must own and operate shipping lines that can facilitate trade. Governments must provide the enabling framework to allow for the organic growth trade infrastructures, ” he said.
He, however, noted that, “it is when the Government creates the enabling framework, the private sector will be able to take advantage of it.”
Dr. Fareed Arthur, the National Coordinator for Ghana’s AfCFTA Coordination Office, disclosed during his remarks that a 2023 report from the African Development Bank revealed that approximately 53 percent of roads on the continent were paved, yet they handled 80 percent of goods and 90 percent of passenger traffic. Additionally, many of the railways, established during the colonial era, have not been adequately maintained and were not designed to support intra-African trade in goods.
He also highlighted that the AfDB report indicated that only 13 African countries had direct flights to approximately 20 neighboring countries, with approximately five percent of the passenger and cargo aircraft from the 230 airlines operating in Africa. Mr. Adomako urged African governments to expedite the process of connecting road networks, ensuring favorable shipping conditions, and establishing carriers to facilitate the movement of people and goods.
Dr. Stephen Amoah, a Deputy Finance Minister, expressed the government’s commitment to collaborating with value chain stakeholders to address logistical challenges in the country, with the aim of enhancing intra-African trade. He emphasized that such collaboration was crucial for enabling Small and Medium-sized Enterprises (SMEs) to thrive and increase their participation in the African Continental Free Trade Area (AfCFTA).
Furthermore, Dr. Amoah emphasized the importance of investing heavily in logistics infrastructure to facilitate seamless trade with neighboring African countries. He called on all stakeholders to unite their efforts and resources to develop an efficient and effective logistics system that would support sustainable business growth.
Dr. Amoah noted that while trade facilitation between two countries elsewhere was often smooth, the situation was different among many African countries. He emphasized the necessity for all stakeholders to join forces to prioritize the development of logistical infrastructure in Ghana.
Ms. Sofia Kamarudeen, the Ghana Component Lead for the GIZ Programme Support to the AfCFTA, explained that the purpose of the dialogue was to delve deeper into logistics issues and provide strong recommendations to the government to address the challenges.
“We’re committed to this topic, which is a long-term ambitious project for Africa. We will continue to support institutions to create more platforms, which will further boost the logistics sector and the progress made towards that,” she said.