Secretary General Wamkele Mene on trade as a catalyst for U.S.-Africa growth

Africa is making significant strides in scaling up investments and enhancing trade facilitation efforts across the continent. The African Continental Free Trade Area (AFCFTA) Secretary-General, Wamkele Mene, recently engaged in a dialogue with CNBC Africa's Fifi Peters at the US-Africa Business Summit in Dallas, Texas to shed light on the continent's ambitions for trade growth. The discussion primarily focused on aligning the African Growth and Opportunity Act (AGOA) with AFCFTA, the impact of potential U.S. political changes on trade agreements, and the complexities of trading in multiple currencies within Africa. One of the key points of emphasis during the conversation was the importance of creating synergy between AGOA and AFCFTA to foster market certainty and predictability for investors and exporters. Mene highlighted the need to design tools that would harmonize the investment provisions of both trade agreements. This alignment is crucial in ensuring a conducive business environment for investors looking to explore opportunities in Africa. The AFCFTA's protocol on investment is pivotal in establishing linkages between the two trade regimes, setting the stage for enhanced trade relations between the U.S. and Africa. The continent's transition towards a unified market was also underscored as an attractive proposition for investors. The consolidation of African economies into a single market under AFCFTA offers investors a streamlined business environment with reduced operational costs. The harmonization of rules of origin and local content regulations further simplifies cross-border investments in sectors like automotive and textiles, promoting seamless business expansion across African markets. Despite the optimistic outlook on trade alignment between AFCFTA and AGOA, the potential impact of U.S. political shifts on trade dynamics was a point of discussion. Mene emphasized that the renewal of AGOA falls under the jurisdiction of the U.S. Congress, with bipartisan support crucial for its extension. While the U.S. administration plays a significant role, Mene reiterated the importance of congressional backing for AGOA's continuity. The upcoming U.S. elections will play a determining role in shaping the future of trade agreements between the U.S. and Africa, with the duration of AGOA renewal being a key consideration for policymakers. In addressing the complexities of trading in multiple currencies within Africa, Mene acknowledged the challenges posed by diverse currency systems on intra-Africa trade and investment. The Pan-African payments and settlement system emerged as a crucial tool in overcoming these hurdles by facilitating seamless transactions across the continent. This system offers a solution to currency convertibility costs and mitigates exposure to currency fluctuations, providing a more conducive environment for intra-Africa trade. With an increasing number of commercial banks adopting the platform, the Pan-African payments and settlement system aims to streamline financial transactions by supporting 42 different currencies across Africa. As Africa continues its journey towards economic integration and trade expansion, efforts to align trade agreements, navigate political transitions, and address currency complexities remain central to fostering a conducive business environment for investors on the continent.