AFREXIMBANK has set up a $1billion African Continental Free Trade Agreement (AfCFTA) Adjustment Facility to help member states adjust to the new trade regime and sudden losses in tariff revenue as a result of its implementation.
AfCFTA is one example of regional and preferential trade agreements being made around the world, including the Regional Comprehensive Economic Partnership (RCEP) between the Association of South-east Asian Nations (ASEAN) member states and Australia, China, Japan, South Korea and New Zealand.
India was supposed to be part of the agreement, but pulled out, highlighting the fact that progress is rarely smooth.
The bank said it will provide supplemental financing to help governments continue their trade facilitating and investment pro-grams and meet fiscal obligations as their economies adjust to AfCFTA trade reforms.
In addition, Afreximbank and the African Union (AU) have developed the Pan-African Payment and Settlement System (PAPSS), a mobile app for businesses.
Afreximbank said the export potential of intra-African trade at more than $84billion, which if tapped would take total intra-African trade to $231billion.
It said the removal of tariffs and non-tariff barriers through the implementation of the AfCFTA should see greater official trade between surplus and deficit countries, and reduce levels of smuggling.
Afreximbank’s $3billion Pandemic Trade Impact Mitigation Facility is providing the much-needed liquidity support to trade payments that are due. It is assisting member countries whose fiscal revenue are tied to specific export sectors to manage the sudden revenue declines as a result of a collapse in global demand and commodity prices.