Your Ghana, My Ghana - Is Africa Day still worth celebrating?

Saturday was Africa Day. An official holiday in Ghana, it commemorates the formation of the Organisation of African Unity (OAU), now African Union, on May 25,1963.  

On that day, 32 heads of independent African states met in the Ethiopian capital, Addis Ababa, to sign the OAU Charter. This was aimed to promote unity and solidarity for accelerated decolonisation of the African continent and an end to apartheid, as well as cooperation for development.

The founding members included leaders like Kwame Nkrumah of Ghana, Julius Nyerere of Tanzania, Gamal Abdul Nasser of Eqypt, Ben Bella of Tunisia, Sekou Toure of Guinea, Kenneth Kaunda of Zambia, Jomo Kenyatta of Kenya and Leopold Senghor of Senegal.  

They were hosted in Addis Ababa by Emperor Haile Selassie, who, as the leader of Africa’s sole unvanquished territory, became the first OAU chair. Today, the political unity envisioned by that dynamic crop of leaders has given rise to the aspiration for economic integration under the African Continental Free Trade Area (AfCFTA), pronounced AfTA), which entered into force five years ago and was officially launched on 7 July 2019.

The AfCFTA agreement has protocols on trade in goods and services, investment, intellectual property rights, competition policy, digital trade and women and youth in trade. It identifies goods for 100 per cent liberalised market access, offers protection for sensitive (often food-related) or exclusive products (such as kente in Ghana) and facilitates tariff reduction schedules for member states.

Of Africa’s 55 nations (including Western Sahara), only Eritrea has not yet signed the AfCFTA agreement. In addition to Eritrea, seven other countries that have not yet ratified the treaty are Benin, Liberia, Libya, Madagascar, Somalia, South Sudan and Sudan.

Five years ago, when country after country lined up to ratify the new trade area agreement, it felt like the impetus for independence had been rekindled. Hopes were high that AfCFTA would stimulate production in Africa and help to facilitate the much-needed linkages between agriculture and manufacturing across the continent.

The main promise of AfCFTA was to create a market of 1.4 billion people with a combined African GDP of US$ 3 trillion a year. This would make it the biggest free trade area in the world.

Such was the euphoria that it was even touted that consumer spending would be up by US$ 1.4 trillion in 2020 and inter-African trade would rise 52% to as much as US$35 billion by 2022.

But even before COVID-19 struck, there were those who warned that given Africa’s past record at integration, the euphoria should be tempered and the process slowed down. And five years after AfCFTA was declared operational, little meaningful trade between African countries has yet occurred under it and the much-desired sector linkages are yet to be created.

AfCFTA challenges

In Ghana, where the AfCFTA Secretariat was established in August 2020, hopes were high among emerging chocolatiers that they could market Ghana’s iconic cocoa industry to the rest of the continent.

But small-scale chocolate manufacturers like Bioko Treats and Mansa Gold say they’ve tried to export through AfCFTA but got no help from the Secretariat.  According to Preba Arkaah, the founder and manufacturer of Mansa Gold chocolates, “The logistics to get our goods to other countries are just so difficult.”

These difficulties include registering with standards boards in different African countries that don’t recognise each other’s certification, for example between Ghana’s Food and Drugs Authority (FDA) and Nigeria’s National Agency for Food and Drug Administration and Control (NAFDAC).

“If I want to export my products to Nigeria, NAFDAC has to accept my products because they don’t recognise Ghana’s FDA acceptance.” “But it’s impossible to register in every country, for example if I also want to go to Kenya,” Preba Arkaah points out.

Rules of origin stipulations provide another example of the difficulties. “My chocolate bar with 70% cocoa content will not qualify because it has 10% imported milk powder.” Regular spray-dried milk powder is unsuitable for chocolate production because it creates a fluffy particle and unsmooth texture, making it necessary to import roller-dried milk powder, Arkaah explains.

“But only a few companies in the world make roller-dried and there’s only one on the continent, in South Africa, but their minimal order is beyond my capacity,” Arkaah says. She also cites the example of hazelnuts, which are typically grown in temperate zones. “We tried to use abrofo nkatie (tropical almonds, grown locally) but it didn’t work, they were too oily,” Arkaah noted.

“It’s not that people don’t have the vision, it’s just that it’s difficult,” Arkaah said. But according to one chocolatier, who asked not to be named, “AfCFTA should learn to work in a cost-effective manner with minimal paperwork.”

Such complaints give the impression of an AfCFTA secretariat that is unresponsive to the needs of local manufacturers, calling into question our reasons to continue celebrating Africa Day.

But according to Afro-optimist, Michael Kottoh, “Africa Day is always worth celebrating because it reminds us that as a people we’re unified by our struggle and we need to never forget that there are great possibilities for us.”

Mr Kottoh describes AfCFTA as “a huge leap forward”. Despite the slowdown, it’s still in the right direction,” says Mr Kottoh, who is Managing Partner at advisory firm Konfidants and Head of Research & Strategy at AfroChampions, a public-private partnership designed to drive Africa’s economic integration.

“If you look at AfCFTA from the signing of the Treaty to ratification, this is probably the fastest trade treaty in the world, considering the number of countries, 54,” Mr Kottoh said. He continued, “The speed with which 44 countries signed in Kigali in 2018 and with which we exceeded the threshold for 22 countries to ratify the agreement in record time in 2019 created the impression that this time things were different. A certain momentum was unstoppable.”

“Reality kicked in when the detailed process of negotiating protocols and tariffs began. “Countries needed to do right by their people and make sure that the national good was not sacrificed to the continental good,” Kottoh points out.

“We’re better off slowing down the process by a few years and getting the details right than having countries pull out, like Brexit, because they were rushed into the implementation phase,” the Konfidants Managing Partner says. 

Recommendations

Meanwhile, Mr Kottoh believes that industry leaders need to take ownership of the AfCFTA process and play more of a role in influencing government to ensure their needs are met.

“Businesspeople don’t want to be seen as criticising the government too much as individuals, and victimisation can be a very real challenge. But if they unify as a group, it’s much more difficult for people to pick on you.”

One particularly worthy AfCFTA initiative cited by Mr Kottoh is the Guided Trade Initiative (GTI). This was set up in 2022 as a pilot scheme to kick-start trade among interested state parties and test the readiness of the private sector and the operational, institutional, legal and trade policy environment under AfCFtA, including export and import processes.

Seven states that participated in the initiative were Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda and Tanzania, representing the five regions of Africa and later joined by Tunisia as an eighth pilot country.

Products traded included ceramic tiles, batteries, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits and sisal fibre. These were selected to stimulate value chain development.

A 2023 study of the GTI published by the Konrad Adenauer Stiftung found a limited awareness and understanding of AfCFTA’s tariff liberalisation scheme. The study found that “small and medium enterprises, including those owned by youth, women and other vulnerable groups, that export relatively small consignments face high freight and logistics costs and therefore need support to enable them to export competitively.”

One type of support identified and tested was the aggregation of shipments to create economies of scale. This should be of particular interest to small manufacturers like Ghana’s chocolatiers.

At the very least, perhaps Ghana’s chocolatiers could lobby to ensure that next time there is an AfCFTA value chain pilot or substantive project, chocolate is included in the list of products. 

The writer is a journalist and economic historian specialising in economic development. For a discussion of these issues, join us on Thursday at 10am on Graphic Online TV’s YouTube channel.