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Economic news for Thursday, January 14, 2021
Source: GNA
01/14/2021
Welcome, Secretary General of AfCFTA
The African Continental Free Trade Area (AfCFTA) Secretariat, with support from the African Import-Export Bank (Afreximbank), will introduce mechanisms to support trade under the agreement.
One of the mechanisms the Secretariat is working on with Afrximbank is the Pan African Payment and Settlement Platform.
Mr. Wamekele Mene, Secretary General of the AfCFTA Secretariat, speaking at a virtual press briefing on the status of the AfCFTA, said that the Bank has agreed to provide the liquidity settlement and payment of a initial amount of $ 500 million.
Negotiations under the AfCFTA began in earnest on January 1, 2021, after a period of five and a half years since the launch of negotiations on June 15, 2015.
Difficult negotiations were followed by the signing of the Agreement on March 21, 2018, its entry into force on May 30, 2019 and the start of negotiations on January 1, 2021.
A total of 54 African Union Member States have signed, with some 34 countries depositing instruments of ratification with the Chairperson of the African Union Commission.
The main objectives of the AfCFTA are: to create a single market for goods and services, facilitate the movement of people, promote industrial development and sustainable and inclusive socio-economic growth, and resolve the issue of multiple memberships in accordance with the agenda. 2063.
Mr Mene said the initiative would allow a trader, under the agreement, to do business with counterparts in other parts of Africa by exporting in local currencies.
“We want to reduce the cost associated with converting local currency into dollars to facilitate business transactions,” he added.
He explained that with the partnership with the Bank, the platform would bring the continent closer to finding solutions to multi-currency trading on the continent.
The secretary-general said they were working with commercial banks on the African continent to raise a minimum of $ 1 billion for the trade finance facility to support SMEs, so that they benefit from the agreement in the area of market access.
He said it was also to ensure that not only large multinationals benefit from the agreement, but also young Africans and women and that in due course they would announce the modalities of access to the facility. trade finance.
Mr. Mene said that the Secretariat is also introducing a digital platform to ensure interconnectivity on the African continent for business expansion and to reach new customers.
He said that with the digital platform, they believed they could accelerate interconnectivity, especially for SMEs on the continent, in order to achieve their goals of reducing barriers to trade and investment in Africa.
Prof Benedict Oramah, Chairman of Afreximbank, said the Bank had designed the platform in partnership with the AU to enable payments for goods and services, and wanted to be the first digital payment system across the continent. .
“It is a platform that will domesticate intra-regional payments, allow the continent to save more than five billion dollars in payment transaction costs per year, formalize a significant proportion of the estimated 50 billion US dollars in trade informal intra-African and, above all, will help to stimulate intra-African trade, ”said Professor Oramah.
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