AfCFTA set to boost trade across Africa

As the global economy is in turmoil due to the COVID-19 pandemic, creation of the vast African Continental Free Trade Area (AfCFTA) regional market is a major opportunity to help African countries diversify their exports, accelerate growth, and attract foreign direct investment. Therefore enabling, the continent to recover losses from the pandemic while boosting further growth and development.

AfCFTA was launched in January this year and aims to reduce trade costs across Africa by eliminating 90% of trade tariffs between participating States. It is reported to be one of the largest free trade areas in the world by population and will enable Africa to integrate further into global supply chains, significantly boosting regional income by an estimated 7% ($450 billion) and lifting nearly 30 million people out of extreme poverty by 2035.  Fifty-four out of the fifty-five Africa Union Member States has signed the Agreement thus far, with 27 of the member states having deposited their instrument of ratification. The development of infrastructure including trade centres, railway systems, primary production projects, and more will be vital to the region and the success of AfCFTA, fuelling growth across the continent.

Cresco Director Ben Verhoef states “With fewer barriers to trade in place, numerous industries will be able to increase their trade output. Thus, encouraging the development of numerous industries and infrastructure, creating knock on effects for surrounding communities and the economy.” Verhoef is the Property Advisor within the Cresco Group and is heavily involved in infrastructure projects across the continent aiding the AfCFTA integration. “In order for trade to flourish a wide range of infrastructure projects will need to be considered to support the anticipated growth in trade,” ends Verhoef.

Financing Projects

The African Export-Import Bank (AFREXIMBANK) is playing a crucial role in supporting the finance required for the AfCFTA enablement. Established in Nigeria in 1993 by the African governments and private and institutional investors from Africa and beyond, AFREXIMBANK’s focus is to finance, promote, and expand inter-Africa trade. For this reason the Bank continually develop strategies to meet their mandate.

Cresco is currently involved in assisting the Bank and its team of professionals in developing some of these strategic initiatives.  Given Cresco’s exposure to and experience with these and other similar initiatives, we are well placed to perform relevant advisory services into Sub- Sahara Africa in support of the AfCFTA initiative.

Setting up your project to benefit from AfCFTA while aiding development can be a challenge.  Learn more about how Cresco can assist you with setting up your AfCFTA project today: