The African Continental Free Trade Area (AfCFTA) is set to begin disbursing funds from its Adjustment Fund to Ghana and other member states that wish to leverage the financing options available under the initiative.
The AfCFTA Adjustment Fund is designed to offer short- to medium-term financial support to State Parties and eligible private sector projects that may face challenges due to declining fiscal revenues from tariff reductions and decreased competitiveness resulting from trade liberalization.
Speaking at a press conference ahead of the Biashara Afrika Summit in Rwanda, Wamkele Mene, Secretary General of the AfCFTA, announced that $1 billion has already been raised for the fund, with efforts underway to reach a target of $10 billion. Mene expressed optimism about the first disbursement, which is expected to take place early next year.
The AfCFTA Adjustment Fund will operate with a blended finance model, incorporating grants, concessional loans, and other financing mechanisms to support eligible projects from both the public and private sectors. This approach is intended to address the investment needs of countries and businesses affected by the shifts in trade policies brought about by the AfCFTA.
Mene also addressed questions regarding the fund’s disbursement process, stating that decisions on capital deployment will be made by the fund itself.
The fund will remain accessible to all AfCFTA member states, regardless of whether they have started trading under the agreement’s rules. Mene highlighted that the fund will particularly focus on supporting productive activities, such as the establishment of manufacturing capacities for components, which could supply global companies like Toyota.
A key board meeting to discuss the fund’s disbursement and mobilization of further capital is scheduled to take place in Rwanda this week. The AfCFTA Secretariat hopes this meeting will pave the way for a roadshow designed to attract additional investments into the fund.
The Biashara Afrika Summit, hosted by Rwanda, aims to boost investment for the successful implementation of the AfCFTA, supporting the broader vision of economic integration across the continent.
SOURCE: http://dew360.net
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