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AU Summit 2020: Afreximbank: Why Africa should speak with one voice on trade
Ahead of the 33rd Ordinary Session of the Assembly of the African Union Commission Summit in Addis Ababa, CNBC Africa’s Godfrey Mutizwa spoke to Dr. Hippolyte Fofack, Chief Economist and Director, Research and International Cooperation at Afreximbank on why Africa should speak with one voice on trade as a way to consolidate its bargaining power on the global stage.
Fri, 07 Feb 2020 11:01:39 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The African Continental Free Trade Area (AfCFTA) is a catalyst for reshaping Africa's trade dynamics towards more manufacturing and increasing its share of global and intra-African trade.
- Afreximbank plays a key role in supporting the AfCFTA through initiatives like the Intra-African Trade Fair and the Pan-African Payment Settlement Systems to promote cross-border trade in local currencies.
- Countries with diversified economies are better positioned to benefit from the AfCFTA, but initiatives like the AfCFTA Adjustment Facility aim to support all nations in overcoming short-term challenges and transitioning towards industrial production.
The 33rd Ordinary Session of the Assembly of the African Union Commission Summit in Addis Ababa is approaching, and the conversation around economic integration and the advancement of the continent is heating up. CNBC Africa recently caught up with Dr. Hippolyte Fofack, Chief Economist and Director of Research and International Cooperation at Afreximbank, to discuss the importance of Africa speaking with one voice on trade to consolidate its bargaining power on the global stage. Dr. Fofack highlighted the pivotal role of the African Continental Free Trade Area (AfCFTA) in reshaping the continent's trade dynamics towards more manufacturing and increasing its share of global and intra-African trade. He emphasized that Afreximbank is actively involved in both technical work on the ground and providing financing to drive this transformation.
The AfCFTA, as Dr. Fofack pointed out, is a continental vision that aligns closely with Afreximbank's strategic plan, focusing on key pillars such as intra-African trade and industrialization. By supporting the AfCFTA through initiatives like joint projects with the African Union, such as the Intra-African Trade Fair, Afreximbank aims to boost intra-African trade by bringing together suppliers and buyers to facilitate deals and introduce new products.
One of the critical areas of focus for Afreximbank is the Pan-African Payment Settlement Systems, which addresses liquidity constraints in African trade by promoting cross-border trade in local currencies. Dr. Fofack noted that the pilot testing of this system within the West Africa Economic Monetary Zone has been well received and is set for full implementation after the successful completion of the pilot phase.
When discussing the readiness of countries to take advantage of the AfCFTA, Dr. Fofack acknowledged that there are differences between nations based on the diversification of their economies. Countries with more diversified economies are generally more prepared to benefit from the trade agreement. To support countries in overcoming short-term adjustment costs, Afreximbank has launched the AfCFTA Adjustment Facility, aimed at mitigating potential fiscal shocks and ensuring that every country emerges as a winner from the trade agreement. Additionally, Afreximbank has allocated $2.5 billion to support the private sector and vulnerable countries in transitioning towards industrial production.
Dr. Fofack's insights underscore the significance of unity and coordinated efforts in realizing Africa's potential as a formidable force in global trade. As the continent continues to navigate the complexities of economic integration and trade agreements, institutions like Afreximbank play a crucial role in driving sustainable growth and prosperity for the region.
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