BUSINESS REPORTER
The drive to promote the African Continental Free Trade Area (AfCFTA) has been escalated with a request for proposal for a consultant to quantify tariff revenue losses for member countries arising from the introduction of Africa’s single market.
There were concerns by countries that opening up their economies would result in tariff revenue losses with a report by the UN Economic Commission for Africa showing that tariff liberalisation under the AfCFTA could result in revenue losses of about US$ 1.9bn.
The hunt for a consultant comes following the launch of the US$1bn Base Fund of the Adjustment Fund by Afreximbank and the AfCFTA Secretariat in February to cushion member states from potential revenue losses.
In a request for proposal notice, which closes on September 9, the consultant will also identify operational guidelines for the Adjustment Fund to mobilise and access funds under the Base Fund of the Adjustment Fund for consideration by the AfCFTA Council of Ministers.
“The objective of the RfP is to solicit proposals from consultants to assist the Bank and the AfCFTA Secretariat to implement the Summit and Council decisions on the operationalisation of the Base Fund of the Adjustment Fund by quantifying the tariff losses to be suffered by AfCFTA State Parties as a result of implementing the Agreement and identifying operational guidelines for contributing and accessing funds under the Base Fund of the Adjustment Fund for consideration by the AU policy organs,” the notice said.
“The consultant(s) will also provide support toward the implementation of the Base Fund. Further, support will be required in terms of mobilising resources and preparing relevant operational documents and procedures for processing applications and disbursing funds under the relevant fund.”
The AfCFTA, which began trading in 2021, creates a single integrated market of over 1.3 billion people, with a GDP of more than $3.5 trillion.
To date 54 of the 55 AU Member States signed the Agreement while 42 countries have ratified and deposited their instruments of ratification of the Agreement with the African Union Commission thus becoming State Parties to the Agreement
In February, the AfCFTA Secretariat and Afreximbank launched the US$1bn Base Fund of the Adjustment Fund.
Afreximbank president Benedict Oramah said at the signing agreement for the management of the Fund that resources required for the Adjustment Fund are estimated to hit US$10bn in 5 to 10 years.
Oramah represented Afreximbank at the signing ceremony while Wamkele Mene represented the AfCFTA Secretariat.
A 2020 World Bank Report shows that the AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion.
If implemented fully, the trade pact could boost regional income by 7 percent or U$450bn, speed up wage growth for women, and lift 30m people out of extreme poverty and another 70m out of moderate poverty and make African countries more competitive.
