AfCFTA Receives Boost with $10bn Fund for African Economies
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The African Continental Free Trade Area (AfCFTA) Secretariat and the African Export-Import Bank (Afreximbank) on Wednesday entered into an agreement on the management of the AfCFTA Adjustment Fund (ADF) estimated at $10 billion in the next 10 years.
The fund is expected to support African countries to bear the loss of revenues from import tariffs and the private sector to effectively participate in the new trading environment established under the AfCFTA, according to Thisday Newspaper report.
The report said that already Afreximbank has committed $1 billion towards the ADF, which includes a base fund, a general fund and a credit fund.
The fund according to the AfCFTA Secretariat and the Afreximbank the base fund would consist of contributions from AfCFTA member countries as “grants and technical assistance funds to address tariff revenue losses as tariffs are progressively eliminated”.
The President/Chairman of the Afreximbank, Prof. Benedict Oramah and the Secretary General of the AfCFTA Secretariat, Wamkele Mene signed the agreement on Wednesday.
The Minister Plenipotentiary (Trade) of the Arab Republic of Egypt, Mr. Aly Basha and some leading African bankers and captains of industry were said to have observed the ceremony.
With the fund, member countries are expected to implement various provisions of the AfCFTA agreement, its protocols and annexes while the general fund would mobilise concessional funding, Thisday report said.
Mene was quoted saying, “As we make significant progress in establishing schedules of tariff concessions, the finalisation of the adjustment Ffund will enable us to maintain and even accelerate the momentum. We now have an excellent tool to provide support to our state parties (member countries) and their private sector through financing, technical assistance, grants and compensation funding.
“It will help them mitigate revenue losses and competitive pressures that may result from reduction in tariffs and liberalisation of markets in order to tap into the opportunities of the AfCFTA. This is another important step towards the successful implementation of the continental free trade agreement.”
Oramah also said “This Adjustment Fund, which is taking shape, comes on top of the Pan African Payment and Settlement System (PAPSS), which was commercially launched on 13 January 2022 in Accra, and the resoundingly successuful second edition of the Intra-African Trade Fair, which held in November 2021 in Durban.
“These are some of the initiatives that we are proud to implement in close collaboration with the AfCFTA Secretariat, setting the conditions that will undoubtedly lead to a smooth implementation of the AfCFTA.
“Today we have launched the base fund of the ADF to address urgent needs of State Parties relating to tariff revenue losses and the transposition costs to enable them to implement the AfCFTA agreement. We will be launching the general fund and credit fund very soon to address the needs of the private sector including the small and medium enterprises, women and youth.
“We look forward to working with all development partners, development financial institutions, commercial banks, export credit agencies and other investors and strategic partners to mobilise resources for the Adjustment Fund to enable the continent to implement the AfCFTA.”, according to THISDAY Newspaper.
The fund is expected to support African countries to bear the loss of revenues from import tariffs and the private sector to effectively participate in the new trading environment established under the AfCFTA, according to Thisday Newspaper report.
The report said that already Afreximbank has committed $1 billion towards the ADF, which includes a base fund, a general fund and a credit fund.
The fund according to the AfCFTA Secretariat and the Afreximbank the base fund would consist of contributions from AfCFTA member countries as “grants and technical assistance funds to address tariff revenue losses as tariffs are progressively eliminated”.
The President/Chairman of the Afreximbank, Prof. Benedict Oramah and the Secretary General of the AfCFTA Secretariat, Wamkele Mene signed the agreement on Wednesday.
The Minister Plenipotentiary (Trade) of the Arab Republic of Egypt, Mr. Aly Basha and some leading African bankers and captains of industry were said to have observed the ceremony.
With the fund, member countries are expected to implement various provisions of the AfCFTA agreement, its protocols and annexes while the general fund would mobilise concessional funding, Thisday report said.
Mene was quoted saying, “As we make significant progress in establishing schedules of tariff concessions, the finalisation of the adjustment Ffund will enable us to maintain and even accelerate the momentum. We now have an excellent tool to provide support to our state parties (member countries) and their private sector through financing, technical assistance, grants and compensation funding.
“It will help them mitigate revenue losses and competitive pressures that may result from reduction in tariffs and liberalisation of markets in order to tap into the opportunities of the AfCFTA. This is another important step towards the successful implementation of the continental free trade agreement.”
Oramah also said “This Adjustment Fund, which is taking shape, comes on top of the Pan African Payment and Settlement System (PAPSS), which was commercially launched on 13 January 2022 in Accra, and the resoundingly successuful second edition of the Intra-African Trade Fair, which held in November 2021 in Durban.
“These are some of the initiatives that we are proud to implement in close collaboration with the AfCFTA Secretariat, setting the conditions that will undoubtedly lead to a smooth implementation of the AfCFTA.
“Today we have launched the base fund of the ADF to address urgent needs of State Parties relating to tariff revenue losses and the transposition costs to enable them to implement the AfCFTA agreement. We will be launching the general fund and credit fund very soon to address the needs of the private sector including the small and medium enterprises, women and youth.
“We look forward to working with all development partners, development financial institutions, commercial banks, export credit agencies and other investors and strategic partners to mobilise resources for the Adjustment Fund to enable the continent to implement the AfCFTA.”, according to THISDAY Newspaper.
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