The adoption of blockchain for payments across borders as well as the provision of a large industrial manufacturing zone that generates income will help set the tone for the African Continental Free Trade Area (AfCFTA).
Akinwumi Adesina, president of the African Development Bank Group, stated this while receiving the AfCFTA Secretary-General Wamkele Mene, in Abidjan on Friday.
He stated that AfDB will integrate AfCFTA into its country and regional integration strategies.
“The implementation of the free trade area will become a key component of the Bank’s lending program. We want to have a critical mass of AfCFTA-aligned investments,” Adesina said.
He stated that the bank would support the AfCFTA Secretariat in implementing its various trade and industrial initiatives and programmes.
He further stated that the Bank would work closely with the AfCFTA Secretariat to ensure that Africa produces at scale.
“We require a large industrial manufacturing zone that generates income and competes on a local and global scale,” he said.
“We have a responsibility to ensure that the African Continental Free Trade Area is an industrial hub. The zone should become an area for manufacturing, not merely for trading,” he added.
Oluseyi Akindeinde, chief technical officer of Digital Encode Limited, stated that the benefits of the eNaira program towards the acceleration of AfCFTA could not be overemphasized.
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He stated that the blockchain adoption in Nigeria eNaira would allow peer-to-peer payments without an intermediary.
“With it, participants will no longer need to convert local currencies into hard currencies which then entailed the funds leaving Africa to be converted before being sent back again to the beneficiary bank – adding days to the transaction time,” Akindeinde said.
“Compliance, legal, and sanctions checks are performed instantly within the system. Near-instant payments process within 120 seconds,” he added.
Akindeinde said Africa’s central banks must work in collaboration with the PAPSS to provide a payment and settlement service to which commercial banks, payment service providers and fintech across the region could connect as ‘participants’.
He said most trade settlements in Africa were usually done in foreign currencies and typically in foreign banks.
Wamkele Menestated that the Secretariat would help member states remove trade barriers to boost intra-African trade. He however stated that they could not do so without the support of the African Development bank.
“We would just be a trading hub with no real output,” he said.
“We want the initiative to run as an African initiative supported by our heads of state and our development finance institutions,” he added.
He further emphasized that the African Continental Free Trade Area provided Africa with a great opportunity to develop the necessary infrastructure to support trade and benefit small and medium enterprises.
Adesina assured the AfCFTA chief of the Bank’s long-term support for the continental initiative. He said it would provide institutional support, particularly in the areas of industrialization, finance, infrastructure, and logistics.
“The bank and the secretariat are to put together an Africa industrialization forum for more direct Bank support.
“We want to ensure that industries emerge in a more structured manner in Africa,” Adesina said.
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