The implementation of the African Continental Free Trade Agreement (AfCFTA) will not be an easy task but requires political will in order to fully integrate a single continental market for goods and services, an official has said.
Wamkele Mene, Secretary-General of the AfCFTA Secretariat said Africans have a duty of economic integration while creating one market and placing Africa for competitiveness for decades to come.
“Implementation of the AfCFTA is not going to be easy, it will be challenging, and it shall require disciplined adherence to the rules decade after decade,” he said at the Afreximbank Annual Meetings in Cairo.
“We have seen how difficult economic integration is from the experience of the EU. The alternative – where we do not implement it – is to forever languish on the periphery of the global economy and to be permanently trapped in a colonial economic model. But in my discussions with our heads of states, the political will to implement the AfCFTA certainly is there.”
While the commencement of free trading under the agreement on January 1, 2021 was partially overshadowed by Covid-19, the elimination of barriers such as tariffs, quotas and duplicative regulations and the achievement of frictionless trade is expected to be an engine of growth on the continent for decades to come.
With the AfCFTA, Mene said the continent has an opportunity to harness the potential of the youthful population to achieve Africa’s sustainable development.
“It is time to implement policy and institutional actions that will remove the encumbrances and unlock opportunities for Africa’s youth,” he said.
The 2022 Afreximbank Annual Meetings are being held under the theme “Realising the AfCFTA Potential in the post-Covid-19 Era – leveraging the power of the youth”.
Benedict Oramah, president and chairman of the board of directors of Afreximbank said the aggressive pursuit of intra-African trade promotion and implementation of AfCFTA remains key to Africa’s development.
Guving his remarks, Oramah said the pilot phase of the commercial operations of the Pan-African Payment and Settlement System (PAPSS) have been launched.
“Eight African central banks and over 45 commercial banks have joined the system that will enable the payment for intra-African trade in African currencies, thereby domesticating all intra-African trade payments and potentially saving the continent over US$5 billion in transfer charges.
A major positive impact will be a potential reduction in external debt incurred by African economies as they invest in infrastructure. With PAPSS, the Ugandan government can pay an Egyptian contractor in Ugandan Shilling while the Egyptian contractor will receive Egyptian Pounds,” he said at the 29th Afreximbank Annual Meetings in Cairo.
He highlighted that Afreximbank is providing trade confirmation lines and correspondent banking services to African banks to support intra- and extra-African trade.
“So far, the Bank has onboarded nearly 500 African banks and opened credit lines for 170 in 38 countries. An amount of US$3,9 billion in limits has been created. Today, Afreximbank boasts of the largest network of connected African banks to ensure that no country is deprived of trade services. And as international banks continue to withdraw from the continent, Afreximbank is developing a strategy to support strong African banks to fill the void, so that African financial markets can be in the hands of Africans,” Oramah said.
The 2022 Afreximbank Annual Meetings focus on key trends affecting the African continent as it forges ahead with implementing the AfCFTA in a changing demographic that is grappling with post pandemic stagflation – Cairo