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Afreximbank launches $1 billion facility to support AfCFTA

Monday July 15 2019
Afreximbank

Afreximbank wants to help countries implement the AfCFTA and stop underdevelopment of Africa. PHOTO | CYRIL NDEGEYA

By RWANDA TODAY

The African Export-Import Bank has launched several initiatives to support the implementation of the Agreement for the African Continental Free Trade Area (AfCFTA).

Afreximbank president Benedict Oramah told Heads of State, at the African Union Summit in Niger to mark the start of the operational phase of the AfCFTA, that Afreximbank was instituting a $1 billion AfCFTA Adjustment Facility to enable countries to adjust to the sudden and significant tariff revenue losses as a result of the implementation of the agreement.

“This facility will help countries to accelerate the ratification of the AfCFTA,” he said, telling the heads of state that, by starting the operational phase of the AfCFTA, “you have started a movement ... You must not look back ... This movement is now unstoppable.”

He added that, as part of its support for the implementation of the 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.

Prof Oramah also told the AU Summit about the launch the Pan-African Payment and Settlement System (PAPSS), the first continentwide payment digital system focused on facilitating payments for goods and services in intra-African trade in African currencies.

“It is a platform that will domesticate intraregional payments, save the continent more than $5 billion in payment transaction costs per annum, formalize a significant proportion of the estimated $50 billion of informal intra-African trade, and above all, contribute in boosting intra-African trade,” he said.

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Prof Oramah said that by making it possible for Africans to pay for intraregional trade in their local currencies, “the digital platform will help stop the underdevelopment of Africa caused by defragmentation of its economies.

“Our goal is to significantly reduce the foreign currency content of intra-African trade payments,” said Prof Oramah.

“It is imperative that we address the economic costs of effecting so many payments in scarce foreign exchange.

Making cross-border payments easier, cheaper and safer is an obvious critical step in creating an Africa we want,” he said.

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