by Justice Lee Adoboe
ACCRA, April 11 (Xinhua) -- China's zero-tariff offer to 53 African countries, set to take effect on May 1, is a game-changer and an impetus to boost the development of strong agricultural, mining and industrial value chains, while also enhancing intra-continental trade, said Jonas Atingdui, a Ghanaian economic analyst.
Atingdui, who is also director of economic affairs at the Kwame Nkrumah Ideological Institute, a local ideological and policy think tank, told Xinhua in a recent interview that the huge appetite of the 1.4-billion-strong Chinese market would benefit exporters of agricultural products such as cocoa, shea butter, timber and minerals, especially value-added products.
"With Ghana shifting toward processing its cocoa beans for export, producing chocolates for the Chinese market will be a game-changer for Ghana," he said.
With Ghana producing 20 percent of the world's cocoa, and about 60 percent together with neighboring Cote d'Ivoire, the export of processed and finished cocoa products to the Chinese market stands to boost foreign exchange earnings for the two countries, Atingdui said.
Another agricultural product Atingdui identified as having strong prospects in the Chinese market is shea butter, a major ingredient in the cosmetics industry, with its estimated market value projected to grow from 220 million U.S. dollars in 2025 to 390 million dollars by 2030.
He said that farmers in northern Ghana, the country's main source of shea butter, stand to gain immensely if the government strengthens export capacity to meet growing demand from China.
Moreover, Atingdui added that Ghana's abundant timber and gold resources would also benefit, as China is one of the leading importers of both commodities.
"China's zero-tariff policy for all 53 African countries is a game changer and significant in many ways. As the United States increasingly closes its market to both African countries and its allies, China's zero-tariff gesture creates an alternative market to compensate for foreign exchange losses from America," he added.
He pointed out that the role of government is crucial in creating an enabling environment for the private sector to leverage these opportunities.
Apart from competing with 52 other African countries for access to the Chinese market, "we will also be competing with Americans, Chinese, Europeans, Latin Americans and other Asian countries. So it is very important that governments put in place targeted policies to increase the capacity of our business sectors, especially exporters, to compete," he said.
He called for improved access to credit and tax concessions for export-oriented industries so they can benefit from the zero-tariff policy.
"We must also improve infrastructure. Infrastructure development is essential. The government, not the private sector, controls key areas such as electricity, water, roads and an effective judiciary, which help create a conducive environment for production," Atingdui added.
Furthermore, he called for strengthening standards, warning that substandard goods from African countries could jeopardize sustainable access to the Chinese market. "However, exposure to Chinese standards inherently enhances the quality, knowledge and processes associated with production."
He urged that the industrial policies of African countries be aligned with the zero-tariff policy, alongside negotiations to remove or reduce non-tariff barriers that still hinder access to the Chinese market.
Atingdui said Africa now has two crucial pillars, the African Continental Free Trade Agreement (AfCFTA) and the zero-tariff policy, to advance its economies.
According to him, AfCFTA allows African countries to specialize in trade inputs among themselves. "Then, as we trade among ourselves in producing more finished products, these products can not only be traded in Africa but also in China."
"Ultimately, it will allow us to enjoy economies of scale, because the Chinese economy is 20 trillion dollars. Such a giant economy will enable us to increase production and expand sales, lowering production costs while increasing revenue and competitiveness," he added.
