AfCFTA to improve Africa’s trade performance on the global market – BoG Governor

Ghana host to AfCFTA secretariat

AfCFTA to lift Africans from extreme poverty

Volume of total exports under AfCFTA projected to increase to 29% by 2035

Governor of the Bank of Ghana, Dr Ernest Addison, has called on African countries to take advantage of African Continental Free Trade Agreement (AfCFTA).

With Ghana being the host secretariat under the free trade pact, Dr Addison believes the benefits of the agreement will significantly eliminate or reduce tariff and non-tariff barriers among some 54 African countries.

Addressing participants at a forum organised by the Ghana Academy of Arts and Sciences, the BoG Governor said AfCFTA will improve Africa’s trade performance on the global market.

“There is a view that African countries can only be competitive globally if they are competitive regionally. Therefore, AfCFTA by the creation of single large market for goods and services, creates opportunities to promote industrial development through diversification and regional value chain development,” Dr Addison said.

“The Agreement is expected to enhance diversification of industrial products, develop regional value chains, and facilitate regional integration as well as cross border payments,” he added.

Touching further on the expected benefits under AfCFTA, Dr Ernest Addison said it offers Africa a wide vantage point, enhancing competition, providing opportunity for Africa to competitively integrate into the global economy, reduce poverty and promote economic inclusion.

“The World Bank, for instance, estimates that implementation of AfCFTA would provide impetus for lifting an additional 30 million Africans from extreme poverty and 60 million from moderate poverty. Real income could also increase by 7 percent or almost US$450 billion and there would be a boost in African trade, especially intraregional trade in manufacturing,” he cited.

He added that the volume of total exports under free trade pact is projected to increase to nearly 29 percent by 2035 with Intra-African exports also estimated to increase by almost 81 percent, while exports to non-African countries are expected to increase by 19 percent.

The central bank Governor however advocated for the leveraging of digital payment systems under AfCFTA to help facilitate trade, increase competitiveness, and improve Africa’s position in the international financial system.

“A strong and well-regulated African financial infrastructure could deepen the benefits of intra-regional trade, eliminate the use of third currency for settlement, improve liquidity management of firms, and reduce transaction costs."

"Beyond the improved speed and lowering of the cost of transactions, an integrated African payment and settlement systems would support AfCFTA by mitigating risks associated with intra-African trade payments and facilitate efficient functioning of African financial markets,” he concluded.