The African Development Bank Group and the Secretariat of the African Continental Free Trade Area (AfCFTA) have signed a Protocol of Agreement for an $11.24 million support package to enhance the Secretariat’s effective implementation.
The signing took place on 25 July 2022, on the margins of the ninth meeting of the AfCFTA Council of Ministers responsible for trade, held in Accra, Ghana.
AfCFTA Secretariat
The AfCFTA Secretariat, currently in phase II of its implementation phase, will benefit from this support package, which aims to boost sustainable intra-Africa trade and to augment the number of participating African member states. The funds are intended to move the African trade integration agenda forward.
The grant, approved in July by the Board of Directors of the African Development Fund, will focus on three areas: 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.
In addition, 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.
H.E. Wamkele Mene, Secretary-General of the AfCFTA Secretariat signed the agreement on behalf of his organization, while African Development Group Bank Vice President for Regional Development, Integration and Business Delivery, Yacine Fall, signed on behalf of Dr. Akinwumi Adesina, president of the African Development Bank Group.
Wamkele Mene said: “We welcome the support of the Bank as this is a clear indication of our strategic partnership that will strengthen the capacity of the Secretariat and facilitate the start of commercially meaningful trade under the AfCFTA preferences. The COVID-19 pandemic and the current geopolitical tensions have created an ethos of urgent collective action for the implementation of the AfCFTA. We all have a shared responsibility to change the destinies of all Africans as we achieve the laudable objective of the AfCFTA.”
“The African Development Bank is proud of the strong partnership with the AfCFTA Secretariat and confident that this institutional support will help support our respective mandates to spur greater continental trade and economic transformation, in line with Agenda 2063’s vision of the Africa we want,” Fall said. “Africa’s hope for building back strong and better lies with the successful implementation of the AfCTA.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Contrary to high expectations among Africa’s business community over the impending take off of the African Continental Free Trade Agreement (AfCFTA), there are indications that necessary modalities are not yet in place for the implementation of the trade agreement. This was made known by the AfCFTA Secretary-General who disclosed that it might take a while to reap the meaningfulness of the agreement. Wamkele Mene, Secretary-General of the AfCFTA Secretariat has said that the full implementation of the African Continental Free Trade Area (AfCFTA) will be a long journey as Africa needs the right equipment for customs authorities at the border to facilitate the fast and efficient trade which goes into effect on January 1.
Wamkele Mene, Secretary-General of the AfCFTA Secretariat
Mr. Mene said the 33 nations have agreed to ratify the agreement; however, many lack the customs and infrastructure to fully implement continental free trade. “It’s going to take us a very long time,” he said.
“If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods . . . if you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement,” he added.
Mr. Mene revealed that the purpose of the agreement is to move Africa from the “colonial commodity export economic model”, and use tariffs as a tool for industrial development.
“We want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere,” he said. “We want to stop approaching tariffs as a tool for revenue. We want tariffs to be a tool for industrial development.”
He cited bureaucratic challenges in the continent that might hinder tariff-free trade, noting Ethiopia’s decision to ban foreign investors from its financial services, which contravenes AfCFTA rules.
“I’m not saying countries must rush to dispute settlement. All I’m saying is that, if they do, the jurisprudence will bring clarity to the body of trade law that we’ve developed in the form of this agreement,” he said.
He added that AfreximBank is working to implement a continental trading platform to enable smaller businesses to trade efficiently in the continent without currency difficulties.
Mr. Mene warned that the AfCFTA created some losers and not enough winners and said there might be backlash to free trade in the continent.
“Often in trade agreements the big winners are the already industrialised countries and the big corporations who can access the new markets literally overnight,” he said.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Nigerian traders in Accra Ghana have reiterated the need for the African Union to intervene in the ongoing altercations between agents of the Ghanaian government and business people from other African countries, especially Nigeria. This became necessary as the Ghanaian government is tightening the noose on foreign-owned businesses in a move that has been described as economic xenophobia targeted against Nigerian businesses in the Ghanaian capital, Accra.
AfCFTA Secretariat
This call was reiterated against the backdrop of the commissioning of the permanent secretariat of the African Continental Free Trade Area (AfCFTA) by Ghana’s President Nana Akufo-Addo and Moussa Faki Mahamat, Chairperson of the AU Commission as they reiterated the importance of the body to the continent’s economic transformation agenda.
The Nigerian business owners however noted that the discriminatory practices of the Ghanaian government targeted against the nationals of other African countries runs counter to the spirit of both Economic Commission of West Africa States (ECOWAS) Protocols and that of the African Continental Free Trade Area (AfCFTA). A cardinal aspect of the ECOWAS Protocols stipulated among other things the right of community citizens to enter, reside and establish economic activities in the territory of member states and outlined a three- phased approach to achieve the “complete freedom of movement” envisaged by the treaty.
The Nigerian government through the Minister for Foreign Affairs, Geoffrey Onyeama, in a reaction posted on his Twitter handle said that “Nigerian Government has watched with dismay the painful videos of the forceful closure of the shops of Nigerian traders in #Ghana, promising that urgent steps will be taken.
Tolu Akande-Sadipe, Chairman, Nigerian House of Representatives Committee on Diaspora Affairs, had promised an investigation into the forceful closure of businesses of Nigerians in Ghana. She stated that the act was against and will inhibit the intent of ECOWAS. “House Committee on Diaspora and the entire @HouseNG 9th Assembly will do whatever is within our scope to ensure that this is investigated and the Government of Ghana @GhanaPresidency takes responsibility for policies that could lead to the destruction of the intents of ECOWAS,” she said.
According to the President of Nigerian Traders Union in Ghana Chukwuemeka Nnaji said Nigerian shop owners were being asked to provide registration of business taxes, resident permit, and standard control and Ghana Investment Promotion Council registration. “Most of our members do not have the GIPC registration, because it requires $1m cash or equity and they gave us 14 days within which to regularise,” Nnaji added.
Some analysts are of the view that Ghana’s discriminatory attitude towards fellow African countries should be enough to protest against the setting up of the AfCFTA Secretariat in that country. Ghana was selected as the venue for the headquarters by African leaders during a Summit of AU Heads of states in Niamey in July last year, to launch the implementation phase of the agreement, which is expected to spur regional trade among member countries. Currently, 54 states have signed on to AfCFTA, out of which 28 have ratified.
Speaking at the event, the Ghanaian President, Nana Akufo-Addo said that “the economic integration of Africa will lay strong foundations for an Africa beyond aid. Africa’s new sense of urgency and aspiration of true self-reliance will be amply demonstrated by today’s ceremony.” He 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 COVID-19 pandemic has heightened the importance of the success of the AfCFTA, the Ghanaian president said. “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,” he said.
AfCFTA, the world’s largest free trade area, has the potential to transform the continent with its potential market of 1.2 billion people and combined GDP of around $3 trillion across the 54-member states of the AU. Mahamat said the opening of the secretariat marked a milestone in the vision of Africa’s founding founders for continental integration. According to Wamkele Mene, the first Secretary-General of the AfCFTA, said the agreement offered an opportunity for Africa to confront the significant trade and economic development challenges: market fragmentation, small national economies, over-reliance on primary commodity exports, narrow export base, lack of export specialization, under-developed regional value chains and high regulatory and tariff barriers to trade. “We have to take action now. We have to take action to dismantle the colonial economic model that we inherited,” Mene reiterated.
The African Development Bank Group provided a $5 million institutional support grant to the AU towards the establishment of the AfCFTA secretariat which is located in an ultra-modern office complex in the central business district of the Ghanaian capital. “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,” said Solomon Quaynor, the Bank’s Vice-President for the Private Sector, Infrastructure and Industrialization. “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,” Quaynor added.
Analysts are of the view that if the African Union fails to call Ghana to order over this seeming reckless disregard for existing protocols within the region and continent at large, that it will set a very wrong precedent which other countries might use in future to justify similar actions, and this might truncate whatever efforts the continent is making towards a harmonized market. Moreso, Nigeria being the continent’s largest market and biggest economy might be pressured by its citizens to explore ways of reciprocating in kind or even pushing for a more damaging protectionist strategy, which will not augur well for both the West African region and the continent as a whole.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
AT least, four African countries are in the race to host the secretariat of the African Continental Free Trade Area (AfCFTA) scheduled to formally take off in July 2019. The countries are Egypt, Kenya, Ghana, and Senegal. It is understood that the AU Commission has set up a panel to evaluate the preparedness of each of the countries applying to host the secretariat.
However, Egypt’s chance of getting the nod of other member states to host the secretariat appears narrow. Egypt’s head of state, President Abdel Fatah al-Sisi, is the current AU chair. Moreover, Egypt is also the host country of the African Export and Import Bank (Afreximbank).
In the same vein, hosting the secretariat may elude Ghana since Cote d’Ivoire, a neighboring West African country, is the host of the African Developing Bank (AfDB). It might be viewed as concentrating Africa’s major economic institution in one region of the continent. For now, the odds appear to favor Kenya, an East African country. It is one of the first batches of countries to ratify the free trade agreement.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
