AFDB Moves To Support Africa Continental Free Trade Area Initiative

AFDB Group President, Dr. Akinwumi Adesina & AfCFTA Secretariat Secretary-General, Wamkele Mene

FOLLOWING the quest to deepen intra-African economic cooperation through trading, African Development Bank (AFDB) and the Secretariat of African Continental Free Trade Area (AfCFTA) have resolved to collaborate to facilitate long term growth of the content.

Group President, AFDB, Dr. Akinwumi Adesina said the bank has found it imperative to support implementation of AfCFTA initiatives and programmes aimed at boosting intra-African trade and industrialization of the continent.

Adesina stated this while receiving AfCTA Secretary-General Wamkele Mene, in Abidjan. He said the institution would integrate AfCFTA into its country and regional integration strategies.

“The implementation of the free trade area will become a key component of the Bank’s lending program. We want to have a critical mass of AfCFTA-aligned investments.

“We have a responsibility to ensure that the African Continental Free Trade Area is an industrial hub. The zone should become an area for manufacturing, not merely for trading,” Adesina stressed.

AFDB Group President said the continent needs “a large industrial manufacturing zone that generates income and competes on a local and global scale.”

Wamkele Mene, the AfCFTA Secretary-General on his part said the Secretariat would help member states remove trade barriers to boost intra-African trade, but noted that the full aim of the body cannot be achieved “without the support of the African Development Bank.”

He exlained that without such robust support, the zone would only be “a trading hub with no real output.”

Mene said the zone would want the programme to be like an African initiative which is supported by heads of states in the continent and development finance institutions.

He noted that the African Continental Free Trade Area provided Africa with a great opportunity to develop the necessary infrastructure to support trade and benefit small and medium enterprises.

Adesina assured the AfCTA chief of the Bank’s long-term support for the continental initiative, particularly in the areas of industrialization, finance, infrastructure, and logistics.

“We want to ensure that industries emerge in a more structured manner in Africa,” AFDB President stated.

Both leaders resolved to draft a memorandum of understanding to strengthen their relationship and facilitate effective collaboration.

The African Development Fund, the Bank group’s concessional lending arm, provided support for the establishment of the AfCFTA Secretariat in Accra, Ghana through a $5 million institutional grant to the African Union.

According to World Bank publication in 2020, implementation of African Continental Free Trade Agreement presents opportunity for African countries to bring about 30 million people out of extreme poverty and raise the incomes of 68 million others who live on less than $5.50 per day.

The AfCFTA is a trade agreement that connects 55 African countries. Facilitation of trade measures devoid of bottlenecks occasioned by Customs procedures, would drive $292 billion of the $450 billion in potential income gains, the World Bank said.