The African Export-Import Bank (Afreximbank) has approved a US$1 billion facility to operationalize the African Continental Free Trade Agreement (AfCFTA) Adjustment Funds. The bank also approved grant funding in the amount of ten million dollars US to be used as a start-up for the Base Fund of the AfCFTA Adjustment Funds.
The AfCFTA Council of Trade Ministers and the Heads of State and Government of the African Union mandated Afreximbank and the AfCFTA Secretariat to establish and make the AfCFTA Adjustment Funds operational, which include the Base Fund, the General Fund, and the Credit Fund. These three funds make up the AfCFTA Adjustment Funds.
The General Fund will be used to mobilize concessional funding, while the Credit Fund will be used to mobilize commercial funding that will be used to support the public and private sector including small and medium enterprises (SMEs), youth, and women to adjust to the new trading environment arising from the AfCFTA.
Professor Benedict Oramah, President, and Chairman of the Board of Directors of Afreximbank commented: “Afreximbank is delighted to have been appointed the Fund Manager of the AfCFTA Adjustment Funds following the extensive collaborative work it has done with the AfCFTA Secretariat and the Africa Union Commission during the past few years. The renewal of the US$1 billion facility and the US$10 million grant funding represents resounding entrustment by our Board of Directors of these efforts. These facilities will again be contributing to making a great idea a reality. We thank the AfCFTA Secretariat for the solid partnership that is bringing the aspirations of the AfCFTA within reach.”
The funding required under the Adjustment Funds is estimated at US$8-10 billion. The AfCFTA Adjustment Fund will be managed by Afreximbank, through its subsidiary, the Fund for Export Development in Africa (FEDA), in collaboration with the AfCFTA Secretariat.
“The endorsement by the Afreximbank Board brings the continent closer to operationalizing the AfCFTA Adjustment Funds before the end of 2022. We urge other development partners and financial institutions to provide additional resources required under the Adjustment Funds to support the implementation of the AfCFTA”, said His Excellency, Mr. Wamkele Mene the Secretary-General of the AfCFTA Secretariat.