The Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Mr Wamkele Mene, says 38 countries have ratified the agreement establishing the AfCFTA.
Mr Mene who said this during an interview with journalists in Abuja stated that there is an expectation for other countries to also carry out the ratification.
According to him “in ratifying an International instrument, the domestic process has to be followed, the legal processes must be followed, the political processes must be followed so that a particular country can be in a state of readiness to ratify.
“There are countries that are ready with a custom infrastructure that is required to be able to trade in a commercial and meaningful sense, South Africa, Egypt Ghana, Kenya, these are countries that have introduced the necessary customs procedures for the trading to start happening”.
“We are in the initial stages of implementation. We are also still negotiating outstanding areas of phase one.
“You will remember that phase one is trading goods and trading services; phase two, which we will start soon around July/ August, is Intellectual property rights, Competition policy, Women in trade and Digital trade. These are the new generation trade issues. That would be the next area of work that we will be focusing on,” he added.
The AfCFTA Secretary General said one of the objectives of the agreement is to ensure that 97% of products traded in Africa should be at zero duty in the next 15 years.
Mr Mene stated that the AfCFTA has also started the pilot phase of the Pan-African payments and settlement platform of six countries in West Africa who have switched on to the platform adding that transactions are already happening within the six countries.
He said “Africa has 42 currencies and the cost of the currency convertibility is a constraint to intra Africa Trade, it makes us feel inefficient, it makes our trade unnecessarily expensive, it adds to the cost of doing business.”
“When the system fully is up and running you will be able to transact with somebody in Kenya in Naira and they will receive Kenya shillings and Afrexim Bank will be the Correspondent facility, we are working with them at the Secretariat, they have been very strong investing in African solutions”.
“So the payment settlement platform will really make a significant contribution and our estimate is that it will reduce the cost of transactions by 5 billion dollars annually; that is the aggregate amount that is spent on currency convertibility,” he stated.
Mr Mele noted that Africa cannot acquire a common currency overnight, adding that the payment and settlement system is the first major step in addressing some of the challenges that are related to the cost of currency.
