Minority slams govt over lack of AfCFTA focus in 2025 Budget

The Minority Caucus in Parliament has criticized the government’s 2025 Budget Statement and Economic Policy, alleging it neglects the African Continental Free Trade Area (AfCFTA) initiative..

The caucus argues that the budget shows a lack of commitment to harnessing AfCFTA’s potential.

In a statement signed by the Ranking Member on Parliament’s Trade, Industry and Tourism Committee, Michael Okyere Baafi, the Minority said the previous New Patriotic Party (NPP) administration had made significant strides in implementing AfCFTA as part of efforts to cushion Ghana against global trade shocks like the Trump-era 10% tariff imposition.

The Minority noted that the previous NPP administration had initiated the National AfCFTA Policy Framework and Action Plan, which allowed several Small and Medium-sized Enterprises (SMEs) to access the AfCFTA market.

They claimed that the Mahama-led administration lacks readiness to handle potential future trade shocks.

“It has no specialized programme or policy to support exporters, expand production or diversify markets,” the statement read.

The Minority Caucus urged the government to swiftly implement strategic reforms, including diversifying export markets, supporting exporters with financial and technical assistance, adding value to exports, and fortifying diplomatic ties with key trade partners such as the United States.

They also called on the government to provide policy clarity on Ghana’s export direction and commit resources to effectively implement the National AfCFTA Action Plan.

Read the full statement below;

PRESS STATEMENT BY THE MINORITY CAUCUS  OF PARLIAMENT ON THE IMPLEMENTATION OF 10% TARIFFS ON GHANAIAN PRODUCTS TO THE UNITED STATES

We wish to thank you for the opportunity to bring to the fore an ongoing trade war that has found its way to affecting Ghana. It is important to bring to the attention of the trading community important developments in the trading world that would affect Ghana’s economy.

We find ourselves, among other African Countries, in the crosshairs of a sweeping tariff escalation by the United States. Just yesterday, President Trump announced the imposition of a 10% reciprocal tariff on Ghana, citing unfair trade practices as a response to Ghana’s 17% average tariffs on U.S. imports. While it is not clear whether this policy affects Ghana’s participation in the AGOA, its implementation seems to be implicit in its execution.

Ghana is one of currently 35 Sub-Saharan African countries that benefit from preferential access to the United States market under the African Growth and Opportunity Act (AGOA), which grants about 6,700 products duty-free status.

United States importers of products that are made in Ghana can import these goods duty-free, resulting in enhanced price competitiveness. These preferences are currently available until the end of September 2025, unless the AGOA legislation is extended or replaced by another arrangement beyond that date.

Qualifying products under AGOA include textiles and clothing, motor vehicles and parts, many agricultural products (including nuts and yams), leather products, chemicals, wine, travel luggage, machinery and equipment, and many more.

The introduction of a 10% tariff on goods that previously entered the US duty-free will likely reduce the price competitiveness of Ghanaian products in the US market. This concerns products that were already subject to standard US import duties and might be affected if AGOA is impacted by this measure.

Sectors that might be greatly affected include:

• Apparel: The apparel industry, which employs over 5000 young people, is particularly vulnerable.
• Cocoa: While most cocoa beans enter duty-free, about 30% of cocoa exports (powder and paste) benefit from AGOA preferences. A 10% tariff would impact this segment.
• Yams: All yam exports to the US benefit from AGOA/GSP preferences, so a 10% tariff would negate this advantage.

It is important to note that the NPP government placed emphasis and prioritized the implementation of the AfCFTA as a response to some of these trade shocks. Diversifying our product range to pay critical attention to the export of manufactured products to other African Countries was a major Policy of the NPP Government. It is important to note that with the implementation of the 1D1F, Ghana increased the exports of products like iron rods, ceramic tiles and plastics to the ECOWAS Region.

Unfortunately, we have not seen a clear policy direction on exports by the NDC government. How they respond to this sweeping tariff by the US is very critical to our exporters, especially those in the apparel industry that employ over 5000 young people.

Additionally, the NPP Government launched and began the implementation of the National AfCFTA Policy Framework and Action Plan, which has seen various SMEs penetrating the AfCFTA market. Again, the government’s budget, as presented by the Minister responsible for finance, has played down the importance of the implementation of AfCFTA based on budget allocation.

Based on its policies, the current government has no response to the current tariff slap. It has no specialized programme or policy to support exporters, expand production or diversify markets.

In light of the foregoing, we would like to recommend the following for the attention of the Government:

Diversification of Export Markets:

• Prioritize the implementation of the African Continental Free Trade Area (AfCFTA) to diversify export markets and reduce reliance on the US.
• Expand exports of manufactured products to other African countries.
• The government should prepare to take advantage of trade diversion based on retaliatory measures that would be implemented by major trading partners

Government Support for Exporters:

• Develop specialized programs and policies to support exporters affected by the tariffs.
• Provide financial assistance, training, and market intelligence to help exporters adapt to the new trade environment.
• Advocate for the extension or replacement of AGOA to maintain preferential access to the US market.

Product Diversification and Value Addition:

• Encourage the diversification of Ghana’s export base to reduce reliance on a few key commodities.
• Promote value in addition to raw materials to increase export earnings, competitiveness and improved local consumption

Negotiation and Diplomacy:

• Seek clarity on how these measures would be implemented and how they affect the extension of AGOA.
• Engage in diplomatic efforts with the US government to negotiate a reduction or elimination of the tariffs.
• Highlight the potential negative impact of the tariffs on Ghana’s economy and its efforts to promote sustainable development.

Enhance Competitiveness:

• Improve the efficiency and productivity of Ghanaian industries to reduce production costs and enhance competitiveness.
• Invest in infrastructure development to reduce transportation costs and improve access to markets.

Policy Clarity:

• The government should provide a clear policy direction on exports and how it plans to respond to the US tariffs.
• Ensure that the National AfCFTA Policy Framework and Action Plan are adequately funded and implemented.

SIGNED

MICHAEL OKEYER BAAFI (MP)

RANKING MEMBER, COMMITTEE ON TRADE, INDUSTRY AND TOURISM