AfCFTA moves to cure intra-Africa trade challenges with digital payment platform

Secretary General of the Africa Continental Free Trade Area (AfCFTA) has announced an upcoming digital payment and settlement platform for cross border transactions in Africa.

Wamkele Mene said in Accra on Tuesday, October 20, 2020, that the digital platform will cure one of the major challenges cross-border African trade.

“One of the biggest constraints to cross-border trading on the African continent is the cost of transactions which is caused by the need to convert the US dollar into local currencies. This high cost of transactions discourages intra-Africa trade and sustains the fragmentation of markets in Africa.

“I am pleased to announce to you today that we are collaborating very closely with the Afreximbank and other stakeholders on the continent to establish an efficient and affordable payment and settlement digital platform for cross border transactions,” he said.

He added that this will be done through a digitised pan-African payment system in support of the implementation of the AfCFTA.

Mr Mene was speaking at the opening ceremony of the second national conference on AfCFTA.

The two-day conference at the Accra International Conference Centre (AICC) is on the theme, “Empowering Ghanaian Businesses to Harness the Benefits of the African Continental Free-Trade Agreement Under the Framework of the National Export Development Strategy.”

Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by eliminating import duties and to double this trade if non-tariff barriers are also reduced.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.

It will also expand intra-African trade through better harmonization and coordination of trade liberalisation and facilitation and instruments across the RECs and across Africa in general.