Zim to tap into US$1bn AfCFTA fund
NDAMU SANDU
Zimbabwe is set to tap into the US$1bn Adjustment Fund meant to assist countries recover from tariff revenue losses arising from the implementation of the African Continental Free Trade Area (AfCFTA).
The resources required for the Adjustment Fund are estimated to hit US$10bn in 5 to 10 years, Afreximbank president Benedict Oramah said after signing an agreement with AfCFTA Secretariat secretary general Wamkele Mene for the management of the fund.
It will be available for member states that signed and ratified AfCFTA.
Mene said the fund will accelerate successfully the implementation the AfCFTA, the biggest trading bloc by members outside the World Trade Organisation.
“As we make significant progress in establishing schedules of tariff concessions, the finalisation of the Adjustment Fund will enable us to maintain and even accelerate the momentum.
“We now have an excellent tool to provide support to our State Parties and their private sector through financing, technical assistance, grants and compensation funding,” he said.
Mene said the adjustment fund will help them mitigate revenue losses and competitive pressures that may result from reduction in tariffs and liberalisation of markets in order to tap into the opportunities of the AfCFTA.
The fund, Mene said, will ensure inclusion of benefits in the implementation of the AfCFTA.
“We want all countries to start from the same vantage point.”
He said Africa has to support and finance its own development and not to outsource to other countries.
Oramah weighed in saying “nobody who wants development goes to beg others to bring development”.
“Today we have launched the Base Fund of the Adjustment Fund to address urgent needs of State Parties relating to tariff revenue losses and the transposition costs to enable them to implement the AfCFTA Agreement.
“We will be launching the General Fund and Credit Fund very soon to address the needs of the private sector including the small and medium enterprises, women and youth,” he said.
“We look forward to working with all development partners, development financial institutions, commercial banks, export credit agencies and other investors and strategic partners to mobilise resources for the Adjustment Fund to enable the continent to implement the AfCFTA.”
The Adjustment Fund consists of a Base Fund, a General Fund and a Credit Fund.
The Base Fund will consist of contributions from State Parties, grants and technical assistance to address tariff revenue losses as tariffs are progressively eliminated and support countries to implement various provisions of the AfCFTA Agreement and its Protocols and Annexes.
The General Fund will mobilise concessional funding, while the Credit Fund will 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.
