Africa needs to bolster its capacity to deliver efficient payment systems, borders, and infrastructure to enable businesses to reap the benefits of the African Continental Free Trade Area (AfCFTA). This was emphasized by Wamkele Mene, Secretary-General of the AfCFTA Secretariat, during a fireside conversation at the Project Management Institute's Global Summit Series in Cape Town. Mene highlighted the importance of strong delivery capacity in unlocking the agreement's potential.
Mene outlined several priorities to turn continental trade commitments into easier access to markets. These include aligning national policies, modernizing customs, and enabling cross-border payments in local currencies. He urged professionals across various sectors, including infrastructure, construction, agriculture, services, and customs, to consider how their expertise could help connect African economies. This, he believes, will facilitate the implementation of the AfCFTA agreement.
The AfCFTA Secretary-General illustrated the challenges of fragmented markets through a transaction between businesses in Ghana and Kenya. Despite trading within Africa, these businesses may need to purchase a third currency, typically the US dollar, to complete payment. Mene estimated that the associated currency conversion costs across the continent amount to approximately $5 billion annually. This highlights the need for a more efficient payment system.
To address this issue, Mene pointed to the Pan-African Payment and Settlement System (PAPSS), developed by Afreximbank in collaboration with the AfCFTA Secretariat. The system enables cross-border payments in local currencies, reducing reliance on third currencies. This practical response aims to reduce friction in payment systems and make access to a continental market commercially useful.
Making trade easier also requires customs authorities to apply agreed rules and governments to align domestic policies with continental commitments. George Asamani, PMI's Managing Director for Sub-Saharan Africa, connected these requirements to the skills needed to deliver programs involving multiple institutions and countries. He emphasized that project management provides the discipline to carry a policy commitment through to a service that businesses can use.
Mene also addressed concerns about the impact of liberalization on domestic industries. He explained that the agreement includes safeguards and that adjustment support can help sectors facing disruption as markets open. Mene emphasized the need to assess potential losses and support affected businesses, with domestic reform and continental cooperation working together to help firms compete in larger markets.
Infrastructure remains central to this effort, with Mene calling for greater attention to project preparation and trade infrastructure, alongside digital investment. By strengthening delivery capacity and addressing these challenges, Africa can unlock the full potential of the AfCFTA and create a more integrated and competitive continental market.
Key points
- Africa must strengthen its delivery capacity to benefit from the African Continental Free Trade Area (AfCFTA).
- The Pan-African Payment and Settlement System (PAPSS) aims to reduce friction in payment systems and enable cross-border payments in local currencies.
- The AfCFTA agreement includes safeguards to support sectors facing disruption as markets open.
