Research before investing under AfCFTA – SMEs advised

Small and Medium Enterprises (SME) must research on products to invest and trade under the African Continental Free Trade Area (AfCFTA), Mr Charles Arthur Ntiri has advised.

The Head of Exports, Ghana National Chamber of Commerce, and Industry (NCCI) said it was important for SMEs to understand that not all products would qualify to trade under AfCFTA and as such not all businesses could be exported under AfCFTA due to stringent requirements.

He, therefore, encouraged businesses to consult appropriate State and private organisations to assist with the procedures and protocols for trade to prevent any loss in investment.

“I know a company that has invested so much and wants to take advantage of AfCFTA and right now we have to advise them to look at even where they source their raw materials,” he said.

Mr Ntiri gave the advice at the first edition of a Public Private Dialogue (PPD) on Private Sector Role and Participation in AfCFTA organised by CUTS International and the GIZ.

Sharing findings of a research under the topic, “Improving the Framework Conditions for The Private Sector to Benefit from AfCFTA”, Mr Isaac Yaw Obeng, Head of Research, CUTS, disclosed that there was generally little knowledge among Ghanaian SMEs about the existence of AfCFTA.

While 60 percent of firms showed commitment to export to other African markets, he said only 22 per cent had acquired the required certificates for exports with 12 per cent having acquired an internationally recognised quality certification for export.

It was also revealed that 42 per cent of SMEs prepared audited financial accounts annually while only 20 per cent had good or excellent capabilities to secure funding from financial institutions.

Dr Ato Panford, Senior Advisor at the National AfCFTA Coordination Office, said good accounting and bookkeeping practices was vital requirement for SMEs that wanted to trade under AfCFTA.

With access to finance being a major challenge for SMEs, he said financial institutions were more willing to help businesses with good bookkeeping practices to expand their operations for the continental market.

“The timing to access the fund is important. We don’t wait until the order is ready and we start scratching our head asking where we can get finance,” he said.

Mr Wisdom Adongo, Senior Project Officer of the Private Federation Enterprises, also called for a review of tax systems, which had a huge impact on businesses, especially on the manufacturing sector that promoted value addition.
He said government could develop tax incentives for domestic businesses to ramp up production for local and African market through AfCFTA and make them competitive.

“We can also aid suppliers in the value chain who provide raw material to companies that export to ensure a sustainable supply chain for manufacturers looking to export, ” he said.