The African Continental Free Trade Area (AfCFTA) Secretariat is developing a Pan-African Payments and Settlement (PAPSS) platform, in collaboration with the Afreximbank to enhance cross border payments.
Mr Wamkele Mene, Secretary-General, Africa Continental Free Trade Area (AfCFTA), said the PAPSS would allow African businesses to make cross border payments for intra-Africa trade in national currencies, thereby saving the continent an estimated five billion dollars in transfer charges that flow out of the continent annually.
He said thus, when a trader in Ghana, trading under the AfCFTA, had to transact with a counterpart in Kenya, that Ghanaian importer would be able to transfer funds in Ghana cedis to the other counterpart who would receive the funds in Kenyan shillings.
Mr Mene made the disclosure at an honorific lecture in honour of Daniel M.C. Korley at the University of Professional Studies, Accra (UPSA) in Accra on the theme, “Creating the Next Generation of Entrepreneurs Through AfCFTA”.
Mr Mene, who spoke on the topic, “The AfCFTA and the New Age of African Enterprise,” said as provided for by the AfCFTA Agreement, the Secretariat had also developed a platform for reporting non-tariff barriers, which disproportionately impacted SMEs due to their limited resources and access to information.
He said the online tool made it possible for African businesses to play an active role in removing obstacles to continental trade by reporting Non-Tariff Barriers (NTBs) online and having them resolved through the mechanism.
He said once complaints were verified, officials in the countries concerned were tasked with addressing the issue within set timelines prescribed by the AfCFTA agreement.
He said while AfCFTA promises real prospects for growth-oriented businesses, a major concern in its implementation was the estimated 335 million businesses across Africa which were the direct beneficiaries but which remained informal.
The Secretary General said remaining informal diminished their ability to take advantage of opportunities offered under the agreement.
He said in Ghana, over 500 small and medium enterprises (SMEs) in the local sector were being supported to formalise their businesses to enable them to compete in formal markets, including the AfCFTA, adding that, “This is a step in the right direction”.
He said promoting industrialisation was back on Africa’s economic policy agenda, with renewed impetus and vigour.
“The AfCFTA which is meant to create a tariff-free continent if fully implemented, could result in increased trade and investment which would be a significant boost to the continent’s efforts at industrialization,” he said, adding that, “The implementation of the AfCFTA would also help to develop essential regional value chains, where two or more regional member states are jointly involved in producing for some other country or for themselves, which could accelerate Africa’s integration into the global economy.”
Mr Mene said the AfCFTA was creating a new narrative that should inspire talented African youth, living in any part of the continent, from Algeria to Zimbabwe, to imagine opportunities across the value chain and to pursue entrepreneurship in the various sectors.
He said more equitable access to the
opportunities arising from the implementation of AfCFTA would create shared prosperity and reduce vulnerability to future shocks; this includes ensuring the effective participation of SMEs, women and youth-led enterprises in the AfCFTA.
He said the AfCFTA, as an important integration initiative for Africa, stands to address some of the most harmful barriers to regional integration, and also contribute to supporting post-Covid-19 reconstruction and economic transformation, embracing all the potentials of its 55 countries.
“Indeed, the Covid-19 crisis has accelerated the business innovations underway across Africa.”
He said the continent’s long-term growth trends and large unmet needs present entrepreneurs and investors with exciting opportunities for business building.
Mr Mene said Africa was full of talented people who, with capital and training, could deliver enormous returns and drive the economic change that was needed.
He said African entrepreneurs, with their energy, expertise, initiative and sense of responsibility, were creating products, opening new markets, and utilising innovation creating opportunities, markets and solutions to social and environmental challenges.
“Africa’s problems are best addressed with African solutions, driven by Africans.” Mr Mene said.
“It is Africans and African entrepreneurs that will grow the African economy, creating an integrated, prosperous, and peaceful continent.”