Dr. Ernest Addison the Governor of the Bank of Ghana (BoG), has stated that the successful implementation of the African Continental Free Trade Agreement (AfCFTA) will need a well-regulated African financial infrastructure, and efficient and resilient payment systems to function.
According to the BoG Governor, a well-regulated financial infrastructure would eliminate the use of third currency for settlement, and improve liquidity and cost of transactions. He thus, admitted that more work needs to be done to realize the full potential of the AfCFTA.
“There is a great deal of work to be done in deepening capital market integration, harmonising the legal and regulatory frameworks of the banking and financial sector, harmonising legislations, and cross-border payment system integration.”
Dr. Ernest Addison
Dr Addison noted that Ghana has taken concrete steps to transform its payment systems through innovation, competition, and digitization. He averred that the automation of the payment systems platforms across the financial sector, including financial technology firms, following the passage of the Payment Systems and Services Act 2019 (Act 987) has brought about significant enhancement in the payment system landscape.
“There is the need to bring into alignment the AfCFTA framework with the World Trade Organisations agreement and other subsisting trade agreements within Africa and other parts of the world to create a virtuous cycle of regional integration and transformative trade regimes.”
Dr. Ernest Addison
Embracing All 54 African Nations
The Governor stated that he is of the belief that AfCFTA would embrace all 54 African nations with an estimated combined Gross Domestic of $2.5 trillion and a population of more than 1.2 billion, making it the largest trading block.
“UNECA… estimates that by 2040, AfCFTA will enhance intra-African trade by 15 percent to 25 percent. The World Bank estimates that the implementing AfCFTA would provide the impetus for lifting an additional 30 million Africans from extreme poverty and greatly enhance the income of over 60 million above the poverty line.”
Dr. Ernest Addison
Dr Addison made this known at the regional course on economic issues in regional integration of AfCFTA in Accra and stressed that African nations, and the Economic Community of West African States (ECOWAS) sub-region, in particular, has a significant role to play in the success of AfCFTA.
The one-week program, organized by the West African Institute for Financial and Economic Management (WAIFEM) is being attended more than policymakers, and state officials responsible for the promotion of AfCFTA. The course is meant to enhance the knowledge of the participants on the general and specific issues relating to the Regional Economic Integration process in the WAIFEM member countries, particularly in the context of AfCFTA implementation. It is meant to build the capacity on AfCFTA issues to deepen trade and promote African integration.
The Director-General of WAIFEM, Dr. Baba Yusuf Musa, in his remarks, noted that the course is to broaden the understanding of the participants on economic, monetary, and financial integration and its impact on trade, investment, and economic growth within the sub-region. “The course draws on the analytical, conceptual, and theoretical perspectives, as well as, case studies from experiences worldwide,” he said.
Dr. Musa asserted that African policymakers had long seen Regional Economic Integration as a mechanism for fostering economic growth, diversification, and prosperity, and therefore, formed regional integration groups such as ECOWAS.
