China's Announcement 54, which offers zero-tariff access to 53 African countries, has raised questions about the ownership and value of "African-origin" exports. A recent opinion piece argues that Ghana's intelligence community should have asked more questions before China answered. The policy, if it runs its course over the next two to three years, is likely to increase export volumes from Ghana to China, driven by cocoa, minerals, and manufactured goods. However, this may also lead to a divergence between Ghana's trade statistics and economic power.
The current policy architecture does not have the capability to notice or measure the divergence between Ghana's trade statistics and economic power. Two further dynamics compound the picture: competitive displacement and negotiating leverage. Firms and investors may prioritize Chinese-market access over intra-African trade under AfCFTA, weakening the continent's integration project. Additionally, China will have an advantage in negotiating a permanent "China-Africa Economic Partnership for Shared Development" due to better data on where value accumulates during the bridge period.
Ghana cannot solve this alone and needs a layered approach, involving national, regional, and continental bodies. At the national level, Ghana's task is to build intelligence and monitoring capabilities to ensure that whatever regional or continental position is eventually taken is built on evidence rather than assumptions. This includes mapping ownership and tracking financing to verify the authenticity of "African value-add" in products.
At the ECOWAS level, harmonizing sourcing and component standards regionally can ensure that African supply chains feed African factories. This will enable African factories to produce goods with real, checkable "African value-add" rather than just paperwork. At the AfCFTA and African Union level, the task is to build a common continental position ahead of the Economic Partnership talks, informed by what individual states like Ghana have observed on the ground during the bridge period.
A local value retention law is needed to change the incentive facing Chinese-financed facilities qualifying for zero-tariff access. The proposed law should not rely on a minimum local ownership requirement, which can be easily defeated on paper. Instead, Ghana and the AU can study the UAE's National In-Country Value (ICV) Program, which scores companies against measurable local value-add, such as local manufacturing spend, local procurement, and Emirati employment.
The UAE's ICV Program has been successful in promoting local value-add, and a similar approach can be adopted in Ghana. This will ensure that companies that benefit from the zero-tariff policy contribute to Ghana's economic development and growth. The program can also be used to monitor and evaluate the impact of the policy on Ghana's economy and make adjustments as needed.
The two-year window offered by China's Announcement 54 is a bridge to a permanent agreement, and Ghana must use this time to build its intelligence and monitoring capabilities, as well as a common continental position. By generating analytic products now, Ghana can contribute evidence rather than catching up with anecdotes. This will enable Ghana to negotiate from strength and ensure that its economic interests are protected.
Key points
- Ghana needs to build intelligence and monitoring capabilities to verify the authenticity of "African value-add" in products.
- A local value retention law is needed to change the incentive facing Chinese-financed facilities qualifying for zero-tariff access.
- Ghana must adopt a layered approach, involving national, regional, and continental bodies, to navigate the implications of China's zero-tariff policy.
