By: Dwight Links
The African Continental Free Trade Area (AfCFTA) has noted that Africa’s fragmented systems are costing the continent billions in intra-trade, investment and convenience.
Wamkele Mene, secretary-general for the AfCFTA, said this last week during a partnership agreement for digital development support with Abu Dhabi registered foundation ADI.
Mene noted that the fragmentation cost is a great inconvenience for African businesses.
“Fragmented systems are estimated to cost Africa close to US$100 billion each year, due to a lack of interoperable digital trade systems that are required to enable more efficient cross-border trade,” he stated.
Mene explained that many businesses, particularly MSMEs and women- and youth-led businesses, remain excluded from cross-border trade not because they lack competitive products, but because they lack verifiable digital identities, have limited and affordable access to finance, interoperable payment systems and trusted digital trade networks.
The AfCFTA Secretariat signed a strategic partnership agreement with the Abu Dhabi Foundation ADI, which is founded by the Sirius International Holding organisation to develop and support digital trade on the continent.
The partnership aims to provide infrastructure to build digital trade on the continent, and to create a joint venture that will mobilise capital to build up intra-African trade.
The AfCFTA indicates that the partnership does not impose budgetary commitments but rather allows the parties to jointly mobilise US$1 billion from institutional, development-finance and private sources, with priority given to African investors.
