The African Development Bank Group has signed a $4.8m institutional support grant to the African Union for implementation of the African Continental Free Trade Area agreement.
The grant, approved by the Group’s Board of Directors in April, forms part of a series of interventions by the bank in its lead role to accelerate implementation of the free trade agreement, seen as a major force for integrating the 55-nation continent and transforming its economy.
The African Union Commissioner for Trade and Industry, Albert Muchanga, signed for the continental body while Obed Andoh Mensah, who represented AfDB’s director of the industrial and trade development department, signed on behalf of the bank, a statement from the AfDB indicated on Tuesday.
African leaders meeting in Niamey, Niger in early July launched the implementation phase of the free trade area agreement established in March 2018 after it became operational at the end of May. Currently, 54 states have signed the deal and are set to begin formal trading in July 2020.
“The AfCFTA is going to work and we are confident that by July 1 next year, all the 55 countries would have been state parties – meaning, they would have signed and ratified the agreement and intra-Africa will start,” Muchanga was quoted to have said.
He urged countries to use this period to complete the parliamentary processes.
Muchanga commended the bank’s strong and consistent support to ensuring smooth implementation of the agreement, saying the grant would be used judiciously for the rollout of various protocols relating to the structure and mandate of the AfCFTA secretariat.
The AU currently has an interim secretariat, tasked to provide the organisational structure for the permanent administrative body, its work programme and related issues including its budget. The Niamey summit announced the citing of the AfCFTA secretariat in Accra, Ghana.
Nigeria had signed the pact on July 7 after recommendation from the Presidential Committee tasked with assessing its impact on the local economy.
According to its promoters, the AfCFTA deal has the potential to create the largest free-trade area in the world, uniting 55 African countries with a combined gross domestic product of more than $2.5tn, adding that it is a major force for continental integration and expansion of intra African trade, currently estimated at around 16 per cent.
It is expected to expand intra-African trade by up to $35bn per year, ease movement of goods, services and people across the continent’s borders and cut imports by $10bn, while boosting agriculture and industrial exports by seven per cent and five per cent respectively.
Andoh Mensah stressed that the deal would help stabilise African countries, allow small and medium sized enterprises to flourish, promote industrialisation and lift millions out of poverty.