The African Development Fund (ADF) said that it has approved the sum of a US$11.02 million support package to help the Permanent Secretariat of the African Continental Free Trade Area (AfCFTA) run its operations effectively and achieve its set goals.
The amount was approved by the Board of Directors and was a part of the contractual support it promised when the secretariat was created in Accra, Ghana on August 17, 2020. This sum is an added amount to the earlier US$5 million given.
With the secretariat getting this funding, the continent, which is regarded by the African Development Bank as having the second-largest free trade area with a potential market of 1.2 billion consumers, will try to improve its level of intraregional trade, which currently stands at less than 18 percent. This number is far below that of Latin America, Asia, and Europe which stand at 22 percent, 50 percent, and 70 percent respectively.
The funds from ADF “will help AfCTFA to increase this by up to $35 billion per year (25 percent) over a decade, lower annual imports by $10 billion, and boost agriculture and industrial exports by up to $45 billion (7 percent) and $21 billion (5 percent), respectively.”
The funds will also “encourage sustainable intra-African trade and to increase the share of African countries participating in it. It is also intended to move the African trade integration agenda forward by enabling the secretariat and the countries of the zone – especially transition countries – to harmonize and integrate national and regional trade policy initiatives”. What that means is that the AfCTFA will help member countries develop regional trade policies that will promote free trade of goods and services amongst member countries.
Read also: AfCFTA will unlock innovation, economic growth across Africa – Sanwo-Olu
Accordingly, the ADF said that “the support will be structured under three components: institutional strengthening of the AfCFTA Secretariat; private sector support to implement the AfCFTA, and support of climate-resilient regional and continental value chains to boost intra-Africa trade.”
“Studies and initiatives will be undertaken to identify new business and economic opportunities for women, to help develop the AfCFTA Women and Youth in Trade Protocol, and to support capacity building and targeted business skills for women.” It added.
Abdu Mukhtar, Director of the Bank’s Industrial Development and Trade Department, points out the importance of these ties. “The relationship between the AfCTFA Secretariat and the African Development Bank Group is crucial to achieving greater continental trade and the economic transformation of Africa. Our Board’s approval of this grant will enable the Secretariat to further ensure that trade is conducted in a harmonious, predictable, and free manner on the continent.”
