The Board of Directors of the African Development Fund approved an $11.02 million support package to the Permanent Secretariat of the African Continental Free Trade Area (AfCFTA) to help it enhance effective implementation.
The AfCFTA Secretariat opened its doors in Accra on 17 August 2020, with the initial support of $5 million to set up the secretariat, the programs, and the tools and to raise stakeholder awareness.
The world’s second-largest free trade area has a potential market of 1.2 billion consumers, 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.
This second phase of support continues to aim to encourage sustainable intra-African trade and to increase the share of African countries participating 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 support will be structured under three components: 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.”