The African Development Bank Group (AfDB) has awarded a $5m institutional support grant to the African Union (AU) for the establishment of the African Continental Free Trade Area (AfCFTA) secretariat. The secretariat is to be located in the central business district of the Ghanaian capital, Accra.
Solomon Quaynor, the Bank’s Vice-President for the Private Sector, Infrastructure and Industrialization said, “The African Development Bank congratulates the AU/AfCFTA on the investiture of the Secretariat hosted by Ghana on 17 August 2020. The Bank is delighted to be associated with this groundbreaking, game-changing, transformational continental initiative in furtherance of the objective to create the Africa we want.”
Quaynor added, “Our support to the AfCFTA is in keeping with the Bank’s role of continental leadership in helping to build special-purpose vehicles that are critical to the successful implementation of crucial institutions to accelerate Africa’s economic development objectives.”
At a ceremony on Monday to commission the AfCFTA’s permanent secretariat, Ghana’s President Nana Akufo-Addo and AU Commission Chairperson Moussa Faki Mahamat reiterated the body’s importance to Africa’s economic transformation agenda.
“The economic integration of Africa will lay strong foundations for an Africa beyond aid,” Akufo-Addo said, “Africa’s new sense of urgency and aspiration of true self-reliance will be amply demonstrated by today’s ceremony.”
Ghana was selected by African leaders as the venue for the headquarters during a Summit of AU Heads of State in Niger’s capital, Niamey, in July 2019. The move came as part of the launch of the agreement’s implementation phase, which is expected to spur regional trade among member countries. Currently, 54 states have signed on to AfCFTA, out of which 28 have ratified the agreement.
President Akufo-Addo appealed to member states that have not ratified to do so before the next AU summit in December, “to pave the way for the smooth commencement of trading from 1 January 2021”.
The novel coronavirus (COVID-19) pandemic has heightened the importance of the AfCFTA’s success, the Ghanaian president said.
He added, “The destruction of global supply chains has reinforced the necessity for closer integration amongst us so that we can boost our mutual self-sufficiency, strengthen our economies and reduce our dependence on external sources.”
The AfCFTA represents the world’s largest free trade area, and has the potential to transform Africa with its potential market of 1.2 billion people and combined GDP of about $3tr across the 54 AU member states.
Mahamat said the opening of the secretariat marked a milestone in the vision of Africa’s founding founders for continental integration.
Wamkele Mene, the first Secretary-General of the AfCFTA, said the agreement offered Africa the opportunity to confront its significant trade and economic development challenges.
He noted that these were market fragmentation, small national economies, over-reliance on primary commodity exports, narrow export base, and lack of export specialisation, under-developed regional value chains and high regulatory and tariff barriers to trade. (Daily News Egypt)