The Permanent Secretariat of the African Continental Free Trade Area (AfCFTA) has been given a support package worth $11.02 million by the Board of Directors of the African Development Fund to help with its more efficient implementation. The AfCFTA Secretariat opened its doors in Accra on 17 August 2020, with initial support of $5 million to set up the secretariat, the programs, and the tools and to raise stakeholder awareness.
A potential market of 1.2 billion consumers exists in the second-largest free trade region in the world, but Africa has the world’s lowest level of intraregional trade at less than 18%, compared with 22%, 50% and 70% for Latin America, Asia, and Europe respectively. The AfCTFA aims to increase this by up to $35 billion per year (25%) over a decade, lower annual imports by $10 billion, and boost agriculture and industrial exports by up to $45 billion (7%) and $21 billion (5%) respectively.
The goals of this second phase of support are to promote sustainable intra-African trade and raise the proportion of African nations taking part 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.
The funding will be divided into three categories: 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.
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.”
