President of the African Export-Import Bank (Afreximbank) Prof. Benedict Oramah has pledged to work with the African Union to arrange an adjustment facility that will be accessible to countries that may suffer sudden and significant tariff revenue losses following implementation of the African Continent Free Trade Area (AfCFTA).
Nigeria's President Muhammadu Buhari signed the treaty on Sunday in the presence of African Heads of States and Governments, delegates and representatives from the private sector, civil society and the media attending the 12th Extraordinary Summit of the AU launch of the operational phase of the AfCFTA.
Oramah explained that the Adjustment Facility (which is a line of credit), sized at $1-$1.5 billion (N540 billion), can be drawn by beneficiary countries within individual country limits established and operated by Afreximbank for each country. The facility will enable the countries to achieve an orderly adjustment to the transition to the AfCFTA regime and facilitate expanded intra-regional trade.
Prof. Oramah said: "This facility will help countries to accelerate the ratification of the AfCFTA," and urged the heads of states not look back because the movement is now unstoppable.
He added that, as part of its support for the implementation of AfCFTA, the bank had provided support to aid the work being done by the African Regional Standards Organisation and the AU in implementing the agreement.
Professor Oramah also informed the summit of the launch the Pan-African Payment and Settlement System (PAPSS), the first continent-wide payment digital system focused on facilitating payments for goods and services in intra-African trade in African currencies.
Today we will launch the Africa-wide digital payment infrastructure - the Pan-African Payment and Settlement System (PAPSS) - that we developed in collaboration with the African Union," he said. "It is a platform that will domesticate intra-regional payments, save the continent more than $5 billion in payment transaction costs per annum, formalise a significant proportion of the estimated $50 billion of informal intra-African trade, and above all, contribute in boosting intra-African trade."
Prof. Oramah stated that, by making it possible for Africans to pay for intra-regional trade in their local currencies, "the digital platform will deal a fatal blow to the underdevelopment of Africa caused by defragmentation of its economies. Our goal is to reduce, significantly, the foreign currency content of intra-African trade payments."
Noting that "No people have achieved meaningful development when their economic progress depends on others," he argued that, in the "renewed focus on industrial and value-chain development across the continent to boost trade and investment, it is imperative that we address the economic costs of effecting so many payments in scarce foreign exchange."