The implementation of the African Continental Free Trade Area (AfCFTA) would spur Africa’s industrialisation and long-term supply chain resilience, Amr Kamel, Afreximbank’s executive vice president in charge of business development and corporate banking, said last week as the Bank opened its annual Trade Finance Seminar (ATFS) and workshop.
Kamel said that by addressing the fragmentation of African economies, the AfCFTA had the potential to foster regional integration and intra-African trade which could help spur industrialisation and build long-term supply chain resilience.
He noted that the export sector inherited from Africa’s former colonial powers had effectively forced the demise of African industry and created a reliance on imported manufactured goods, and said that the establishment of the AfCFTA marked a strategic shift from small and fragmented markets across Africa towards regional markets that offered greater opportunities for economies of scale and for the deployment of regional integration to drive trade and development.
“The continent’s leaders and its people recognised that working collectively is the best way to reverse trends that have seen Africa stuck on a 3% share in global trade, 15% in intra-African trade, and one of the world’s least diversified export baskets,” he said.
“But a major challenge to the AfCFTA,” he warned, “is the high trade finance gap, estimated at US$82 billion, according to a recent Trade Finance Survey jointly conducted by Afreximbank and the AfDB. “This lack of adequate trade finance is a significant non-tariff barrier to trade and can limit the full trade potential of the AfCFTA.”
He said that Afreximbank had taken a series of steps to support African trade and the implementation of the AfCFTA, including helping to fill both financing and knowledge gaps in Africa’s trade finance market.
The ATFS, now in its 21st edition, attracted over 500 participants, including senior executives from African banks and financial institutions to regulatory institutions and hedge funds.
