Mr Speaker, thank you for your kindness and opportunity.
Mr Speaker, the drive to Africa's development remains bedded on its unity. African unity remains a vision that was and is being advocated for, by many politicians, scholars, organisations and individuals on the continent. Undoubtedly, the efforts of the first President of Ghana, Dr Kwame Nkrumah were geared to ensure the conception of a united continent, which is not only characterised by political unity but also economic unity, a joint military force, a common foreign policy and a continent where all artificial borders are non-existent.
Mr Speaker, contemporary Africa largely depends on the African Union (AU) to ensure a successful integration of the countries on the continent. An agendum of economic unity by member states, as featured by the African Continental Free Trade
Agreement (AfCFTA), which aims at ensuring the creation of a single continental market for goods and services with free movement of business persons and investments.
Mr Speaker, Ghana has again proved to be a beacon for a positive African revolution, following the acceptance of the nation's bid to host the secretariat of the African Continental Free Trade Area (AfCFTA). Not to put the cart before the horse, this is nonetheless an achievement worthy of note in the history of Ghana and Africa at large. It is pleasant to see progress in the objective to unify the African continent in all of its resources, with a sincere aim to improve the lives of the people of Africa, provide more opportunities and promote peace and harmony.
The African Continental Free Trade Area (AfCFTA), which has been under discussion for quite some time now has continued to stir up interests and has increased in importance exponentially as more and more stakeholders are realising the value and potential it holds. Free movement of persons; promotion of goods and services; accessibility to a wider range of entrepreneurial support in the form of funding and logistics are all important ingredients for the development we wish to see here in Africa.
Mr Speaker, taking into account the understanding of the layman on this issue, the AfCFTA may be demonstrated by the analogy of trade occurring in large countries in terms of area. Nigeria, for example, with an estimated GDP of US$376.284 billion in 2017 and a population of over 200 million, may be seen as a large country compared to Ghana, and for that matter it is capable of generating trade activity in larger volumes. The larger the market- space, the greater the potential for increased demand of goods and services. This then affects supply in a positive manner for the growth of businesses. This is the kind of environment we need.
One key component of the AfCFTA will be to create that large market-space for business persons to operate in, for example, Wenchi in Ghana, to supply goods produced to consumers in Kigali-Rwanda, and vice versa free of tariff.
Retracing the objectives of the AfCFTA, Mr Speaker, the African Union report stated that the CFTA will create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way to accelerate the establishment of the Customs Union.
It will also expand intra-African trade through better harmonisation and coordination of trade liberalisation, across Africa in general. It will resolve the challenges of multiple and overlapping memberships and expedite regional and continental integration processes. Competi- tiveness will be enhanced at the industry and enterprise levels through exploiting opportunities for scale production, continental market access and better reallocation of resources.
Mr Speaker, as several individual and organisational studies probe into the longevity of the AfCFTA, we are continuously prompted to factor in all challenges and possibilities to ensure optimum operation. One of such is a report from the United Nations Conference on Trade and Develop- ment (UNCTAD), which recently discussed the ‘Rules of origin'— what it believes to be a key component of success for the Agreement signifying a simple and business- friendly trade arena.
Theoretically, ‘Rules of origin' would represent a passport for goods to circulate duty-free within a free trade area (FTA) as long as those goods qualify as originating within the FTA. It is therefore important to make trade within African countries more attractive, considering the reality that
many African countries may already be used to trading with their foreign counterparts over the years.
Mr Speaker, I will again highlight that, economic benefits such as employment creation, capital inflows, influx of goods and services, and a boost of the tourism industry would be directly generated along with the CFTA Secretariat based in our beloved country, Ghana and ripple to all participating States.
Mr Speaker, Ghana has managed to maintain ideal bilateral relations with other States within and outside Africa, and this certainly speaks volumes about the capability of the nation to adequately manage the AfCFTA Secretariat, on a positive record of negotiation capacity and amiable attitude towards member States in the African Union.
Mr Speaker, Africa's trade has grown rapidly in recent decades. From 1990 to 2017, the region's trade openness (imports and exports of goods and services) increased from about 53 per cent of GDP to 67 per cent after peaking around 2011 as commodity prices surged.
The UNCTAD also reported that intra-African trade is a mere 15 per cent of the total trade volumes generating from the African continent,
compared to areas abroad which are as high as 61 per cent in Asia, 67 per cent in Europe and 47 per cent in America, while the overall intra- African trade is miniscule. Studies by a Council on Foreign Relations shows that about 42 per cent of intra-African trade consists of industrial goods. I interpret this to be a good potential for the sustainability of the AfCFTA, even as it is expected to grow.
With the agreement underway, the gross domestic product of most African countries could increase by one per cent to three per cent, once all tariffs are eliminate. Also, according to UNCTAD estimates, though tariff may not be the only barrier for increased intra-African trade, Regional Economic Outlook on Sub- Saharan Africa believes that the agreed 90 per cent tariff cut would increase intra- African trade by about US$16 billion or about 16 per cent over recent average levels.
South Africa alone is the source of about 35 per cent of all intra-regional imports in Africa (and about 40 per cent of intra-regional manufacturing imports). Specifically, exports to Sub- Saharan Africa and South Africa generates a significant US$22.8 billion compared to Nigeria and Ghana generating US$5billion and US$2 billion respectively. Interestingly,
Ghana and Nigeria export shares are sourced from South Africa which attests to their 35 per cent intra- regional imports.
Following this narrative, the efforts of Ghana matched up adequately when focus is placed on trade volumes within the ECOWAS region only, just as South Africa exerts dominance in the southern bloc. With the Secretariat here in Ghana, I foresee an improvement in Ghana's contribution in the years to come.
Mr Speaker, the President of the Republic of Ghana, His Excellency Nana Addo Dankwa Akufo-Addo provided some reasons why he believes this country is an ideal place to site the headquarters. The President did well to mention that Ghana through the ages continued to play a pivotal role in the unity of Africa. This has shown Ghana's commitment for the success of the Agreement and its interest to sustain it cannot be overemphasised. I earlier expressed that Ghana should be the ideal choice, because she has a long history of peace and stability, and it has formed an undisputed argument for the case of Ghana.
As major players like South Africa strive to increase trade volumes within Africa, the Agreement is indeed poised to commence an economic