Rwanda on March 10 signed a host agreement with the Secretariat of the African Continental Free Trade Area (AfCFTA) and the Afreximbank for the $10 billion Adjustment Fund aimed at supporting all initiatives geared towards the implementation of the AfCFTA.
The fund is expected to serve as a vehicle for mobilizing funds, develop and operate a compensation facility aimed at mitigating the short-term impact of tariff revenue losses of state parties.
The launch was hosted by the Minister of Foreign Affairs, Vincent Biruta, together with the Minister of Trade and Industry, Jean Chrysostome Ngabitsinze, Kanayo Awani, Executive Vice President of the Intra Africa Trade Bank, Clare Akamanzi the CEO of Rwanda Development Board, Dennis Karera, the EABC Vice Chairperson, Francoise Mubiligi, the Chairperson, Rwanda Private Sector Federation, and many other senior of officials from both the government and the private sector.
The East African Business Council (EABC) is the regional apex body of private sector associations and corporates from the seven EAC countries.
Continental integration initiatives and engagement
During the launch, Karera hosted Wamkele Mene, the AfCFTA Secretary General, and his team, to discuss various continental integration initiatives and engagement related to partnership in the successful implementation of the AfCFTA and how the agreement is poised to benefit the private sector in the EAC.
Karera appreciated the Secretary-General for his continued involvement of the private sector in the AfCFTA implementation process and most importantly championing the roll-out of the AfCFTA Guided Trade Initiative that has practically enabled businesses to trade and called upon the private sector in the EAC region to take up the opportunity presented by the initiative.
In July 2021, Karera was given an extra assignment as the regional business community’s focal point on the AfCFTA. He told The New Times that AfCFTA is a golden opportunity for Africa.
According to the EABC, the continental priorities presented to the AfCFTA Secretary General include:
- 1. The AfCFTA Secretariat to support the regional Business Councils including EABC, SADC, COMESA, ECOWAS Business Councils and any other that would want to join, in establishing a formal engagement platform with the AfCFTA Secretariat and implementation of the agreement jointly.
- 2. The AfCFTA Secretariat and the EABC to work on a joint AfCFTA awareness strategy aimed at scaling up sensitization of the private sector on the AfCFTA protocols and its benefits to the private sector.
The Strategy is to be launched at the forthcoming AfCFTA business forum slated to take place in Cape Town, South Africa tentatively from April 15-19.
- 3. On mobilizing resources to support regional Business Councils to raise awareness on matters pertaining to the AfCFTA, the Secretary-General committed to supporting the EABC-AfCFTA promotion programmes through the private sector support programmes at AfCFTA Secretariat – technical assistance facilitation – as well as the AFDB support programme.
- 4. Convening Regional Business Councils Summit to engage governments on the status of the AfCFTA implementation. The role of the continent’s eight RECsis critical especially as the latter are building blocks for the AfCFTA.
- 5. Establishment of One Stop Centre to create efficiency in doing business across the continent.
- 6. Establish data centers to access market-related information across the continent. The Secretary-General committed to supporting the EABC in its efforts to establish regional a regional data center with outlets in all partner states to enable the private sector to access market information on product availability and access while trading through the AfCFTA.
- 7. Regular engagement with the business membership organisations (BMOs).
As noted, Mene committed to hosting the private sector from the RECs in the annual business forum to discuss the private sector priorities at the continental level.
More about the newly launched AfCFTA Adjustment Fund
The Fund headquartered in Kigali, Rwanda, will support AfCFTA state parties to adjust to the new liberalised and integrated trading environment established under the AfCFTA Agreement.
It was established by the AfCFTA Secretariat and Afreximbank following a mandate from the African Union (AU) Summit of Heads of State and Government and the AfCFTA Council of Ministers responsible for trade.
The Adjustment Fund addresses among others, potential tariff revenue losses, infrastructure deficits to facilitate trade growth and possible supply chain disruptions that states parties may face in the implementation of the African Continental Free Trade Agreement.
The AfCFTA Adjustment Fund consists of three sub-funds: the Base Fund, the General Fund, and the Credit Fund.
The Base Fund will utilise contributions from AfCFTA state parties as well as grants and technical assistance to address tariff revenue losses that would result from the implementation of the AfCFTA Agreement.
The General Fund will finance the development of trade-enabling infrastructure while the Credit Fund will be used to mobilise commercial funding to support both the public and private sectors enabling them to adjust and take advantage of the opportunities created by the AfCFTA.
The Fund for Export Development in Africa (FEDA), the impact investment arm of Afreximbank, was selected as the Fund Manager of the AfCFTA Adjustment Fund.