Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi has reiterated the need for concrete steps to be taken to expand production and delivery of goods and services to promote regional trade and growth under the African Continental Free Trade Area.
According to her, this will help accelerate the progress of the implementation of the AfCFTA Agreement and promote Africa’s inclusive growth and sustainable development in the context of cross-border payment system.
She made the call at the 2022 edition of the Money Summit organised by the Business and Financial Times, on the theme ‘Africa’s Economic Growth – Facilitating Investment, Payments and Settlement Systems.
“Intra-regional trade presents another big opportunity for the continent’s economic growth prospects, which must be fully activated. The African Continental Free Trade Agreement (AfCFTA) creates for the first time, a single African market for goods and services, that transcends the boundaries of each of the continent’s 54 nations. With trading under the regime having commenced in January 2021, concrete steps need to be taken to expand production, delivery, and payment channels to promote trade, investments, and growth,” she said.
She also called for a more integrated solutions approach to tackle the inherent frictions in cross-border payments in Africa.
“Trade volumes under the AfCFTA will be driven to a large degree, by investments that will help to expand production and processing capacity in key value chains, develop key infrastructure to support the logistics of
delivery of goods and services and payments, promote access to efficient and deep financial markets. Also critical will be investments in human capital and digitalisation, and the strengthening of business law regimes to promote investor confidence,” she added.
The African Continental Free Trade Area is widely seen as a crucial driver for economic growth, industrialization and sustainable development in Africa.
Despite the opportunities, many stakeholders have reiterated the need for the many challenges associated with the implementation of the agreement to be addressed.
Fears of significant tariff revenue losses and an uneven distribution of costs and benefits are among the main obstacles to the continent’s integration.
Already, recent projections from the Economic Intelligence Unit, EIU indicates that the African Continental Free-Trade Area agreement, which aims to reduce tariffs and promote trade across the continent will have a limited impact on trade for several years, as most non-tariff barriers will remain in place in the medium term and logistical bottlenecks will impede trade liberalisation.