The take off of the African Continental Free Trade Area (AfCFTA) got a notch better yesterday, when the African Development Bank (AfDB) Group, signed a $4.8 million institutional support grant to the African Union (AU) for its implementation.
The grant, earlier approved by the Group’s on April 1, 2019, forms part of a series of interventions by the region’s biggest development lender in its role to accelerate implementation of the free trade agreement, seen as a major force for integrating the 55-nation continent and transforming its economy.
AU’s Commissioner for Trade and Industry, Albert Muchanga and Andoh O. Mensah, who represented the bank’s Director of the Industrial and Trade Development Department (PITD), sealed the deal that signaled the startup of the implementation.African leaders met in Niamey, Niger, on July 7 and 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 July 1, 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,” Muchanga said.
While urging the countries to use the one-year period to complete the parliamentary processes, leading to ratification, he commended the AfDB’s strong and consistent support to ensure smooth implementation of the agreement.He said 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 organisational 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 the continental integration and expansion of intra African trade, currently estimated at around 16 per cent.
The 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 seven per cent and five per cent respectively.
Mensah pointed out that the deal will help to stabilise African countries, allow small and medium sized enterprises to flourish, promote industrialisation and lift millions out of poverty.
“If 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.
He added that the goals of AfCFTA are aligned to the AfDB’s flagship High 5s initiative- light up and power Africa; feed Africa; industrialize Africa; integrate Africa; and improve the quality of life for the people of Africa.