AfCFTA Calls for Stronger Delivery Capacity to Unlock Businesses

Wamkele Mene, Secretary-General of the African Continental Free Trade Area (AfCFTA), emphasized the need for Africa to enhance its delivery capacity for payment systems, efficient borders, and infrastructure during a PMI Global Summit Series in Cape Town. Mene, alongside PMI’s Managing Director for Sub-Saharan Africa, George Asamani, discussed the steps required to transform continental trade commitments into accessible markets.

Key priorities include harmonizing national policies, modernizing customs, and facilitating cross-border payments in local currencies. Mene urged professionals in various sectors to contribute to creating a unified market by leveraging their expertise. He highlighted the financial burden of fragmented markets using a transaction example between businesses in Ghana and Kenya, which may necessitate converting payments to a third currency, such as the US dollar, resulting in estimated annual costs of US$5 billion.

To address this, Mene introduced the Pan-African Payment and Settlement System (PAPSS), a tool developed by Afreximbank and the AfCFTA Secretariat, that allows for cross-border payments in local currencies, minimizing dependency on third currencies. This payment example underscores the significance of integration mechanics for businesses.

Mene stressed that the effectiveness of trade across borders hinges on the supporting systems and the agreements themselves. Reducing friction in these systems can make accessing a continental market commercially beneficial. Additionally, customs authorities must enforce agreed rules, while governments must align domestic policies with continental commitments.

Asamani connected these requirements to the skills needed in delivering programs involving multiple institutions and countries. Asamani emphasized that a continental agreement's significance lies in businesses' ability to utilize it, which requires professionals who can coordinate institutions, manage risk, deliver reliable systems, and maintain focus on the intended benefits.