Although the IMF agrees that the implementation of the agreement will boost trade on the continent, it will affect earnings and employment opportunities in some sectors of the economy.
IMF says Ghana could face revenue shortfalls if it implements the African Continental Free Trade Agreement
The International Monetary Fund (IMF) says Ghana could face revenue shortfalls if the country implements the African Continental Free Trade Agreement (CFTA) this year.
The Country’s Representative for the IMF, Albert Touna Mama made the revelation at the launch of the IMF’s spring 2019 Regional Economic Outlook.
He said, “Our policy message is to try to put the necessary infrastructure or policies to shelter part of the population that will be affected.”
The African Continental Free Trade Agreement is to boost trade within Africa by removing trade barriers.
So far, 22 countries including Ghana have ratified the agreement.
The CFTA together with other requirements enable countries that are signatory to the agreement access to a market of 1.2 billion people with a combined Gross Domestic Product of 2.5 trillion dollars.
The benefit notwithstanding, the IMF is warning that Ghana could lose revenue due to requirements to reduce and scrap some tariffs.
Mr Touna Mama hence urged policymakers to consider structural reforms to improve agricultural productivity and strengthen the competitive advantage of the other economies.
Meanwhile, Finance Minister, Ken Ofori-Atta who was also the event said alternative measures are being considered to curtail the impact on the country’s fiscal balance.
He said, “The issue of diversification also goes to talk about an outward reach in terms of our production, so we move more into an export-oriented base," adding that, "If we are able to link in positively to the Free Trade Continental Zone, that becomes a 2.5 trillion economy”.
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