A year on since the African Continental Free Trade Area (AfCFTA) journey began, the continent has failed to complete the agreement. Wamkele Mene, Secretary-General, AfCFTA Secretariat, thus, blamed the inability of the private sector participation as the reason the agreement has since not been completed one year on.
The Secretary-General noted that the AfCFTA Secretariat is finding it difficult to get the private sector on board in a bid to achieve its objective of getting all hands on deck to make Africa great.
“For now, the biggest hurdle for the Secretariat appears to be how to get the private sector to own the implementation process, as it is said that it is the private sector that does trade and not governments.”
Mr Wamkele Mene
In that regard, Mr Wamkele Mene disclosed that a new private sector engagement strategy has been developed to help identify initiatives to facilitate the development of the regional value chain on the continent through the inclusion of women and the youth. The strategy, he pointed out that it covers four key sectors.
“This strategy focuses on four initial priority sectors of values chains that include Agro-processing, automotive sector, pharmaceuticals, transport and logistics based on the potential for import substitution and existing production capabilities.”
Mr Wamkele Mene
Mr Wamkele Mene stated that within the one year period since the organization started, the AfCFTA Secretariat in collaboration with Afreximbank has mobilised a facility of USD 1 billion for the development of the automotive sector, to support industrialisation in Africa through an automotive fund.
“Progress has also been made with the successful piloting and execution of monetary transactions in the West African Monetary Zone (WAMZ) under the Pan-African Payments and Settlement System (PAPSS), with launching set for January 13, 2022.”
Mr Wamkele Mene
He disclosed that work is underway for the development of the necessary protocol to operationalise the AfCFTA Adjustment Fund- a USD10 billion-dollar fund, aimed at cushioning countries that are likely to suffer short-term tariff revenue losses because of the implementation of the AfCFTA.
The Inception of AfCFTA
Africa has since January 1, 2021, been on a journey to create the world’s largest single market with a population size of 1.3 billion people and a combined Gross Domestic Product estimated at USD 3.4 trillion.
The idea for this journey was mooted in Addis Ababa of Ethiopia when the Assembly of Heads of State and Government during the 18th Ordinary Session held in January 2012, decided to establish a Continental Free Trade Area by 2017 as a flagship project of Agenda 2063 of the African Union (AU).
The trade area was seen as a catalyst for economic growth, industrialisation, and sustainable development in Africa.
It was until March 21, 2018, at Kigali in Rwanda when 44 of the 55 members of AU brokered and signed an agreement establishing the African Continental Free Trade Area (AfCFTA).
This was after a series of negotiations began in 2015 and lasted for about three years.
Amid the COVID-19 pandemic that caused a global human catastrophe in 2019 and the years that ensued, Ghana as host to the Secretariat managed to commission and hand over the facility to AU in Accra, on August 17, 2020, with a South African becoming the first Secretary-General of the Secretariat.
Trading under the AfCFTA commenced on January 1, 2021, in line with the decisions of the 13th Extraordinary Session of the African Union Assembly in December 2020.
So far, 54 African countries are signatories to the AfCFTA Agreement with 42 countries ratifying the Agreement, and 39 becoming State Parties.
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