The African Development Bank Group has signed a $4.8
million institutional support grant to the African Union (AU) for the
implementation of the African Continental Free Trade Area (AfCFTA).
The grant, approved by the Group’s Board of Directors on 01 April 2019, forms
part of a series of interventions by the Bank in its lead role to accelerate
implementation of the Free Trade Agreement, seen as a major force for
integrating the 55-nation continent and transforming its economy.
Albert Muchanga, AU’s Commissioner for Trade and Industry, initialled for the
continental body, and Obed Andoh Mensah, representing the Bank’s Director of
the Industrial and Trade Development Department (PITD), signed on behalf of the
Bank, signalling the start-up of implementation.
African leaders meeting in Niamey, Niger in early July launched the
implementation phase of the free trade area agreement established in March 2018
after it became operational at the end of May this year. Currently, 54 states
have signed the deal and are set to begin formal trading next July.
“The AfCFTA is going to work and we are confident that by the 1st of July next
year, all the 55 countries would have been state parties – meaning, they would
have signed and ratified the agreement and intra-African will start,” Mr
Muchanga said and urged countries to use this period to complete the
parliamentary processes.
Mr Muchanga commended the Bank’s strong and consistent support to ensure smooth
implementation of the Agreement, saying the grant would be used judiciously for
the rollout of various protocols relating to the structure and mandate of the
AfCFTA secretariat.
The AU currently has an interim secretariat, tasked to provide the
organizational structure for the permanent administrative body, its work
programme and related issues including its budget. The Niamey summit announced
the siting of the AfCFTA secretariat in Accra, Ghana.
The Continental Free Trade deal has the potential to create the largest
free-trade area in the world– uniting 55 African countries with a combined
gross domestic product of more than $2.5 trillion. It is a major force for
continental integration and expansion of intra African trade, currently
estimated at around 16%.
The trade agreement is expected to expand intra-African trade by up to $35
billion per year, ease movement of goods, services and people across the
continent’s borders and cut imports by $10 billion, while boosting agriculture
and industrial exports by 7% and 5% respectively.
In his remarks, Andoh Mensah stressed that the deal would help stabilise
African countries, allow small and medium sized enterprises to flourish, promote
industrialization and lift millions out of poverty.
“If the AfCFTA is complemented by trade facilitation reforms, reduction in
non-tariff barriers, improved infrastructure and policy measures to encourage
employment and private sector investments, it will stimulate poverty reduction
and socio-economic development across Africa,” he said.
GNA
