The Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Mr. Wamkele Mene, has described an efficient implementation of the intra-African free trade agreement as a critical tool in the hands of the continent's leaders to stimulate and re-inject dynamism into Africa's post COVID-19 economy.
Mene, who participated as the guest speaker in a virtual conference that was hosted by the American Business Council (ABC), Nigeria, in Lagos, at the weekend, said the AfCFTA remains the continent's hope for economic recovery.
He, stressed that no African country has the financial muscle to initiate a significant economic stimulus package the way the United States of America has done when it launched more than $1 trillion as stimulus package.
He added: "I believe that even with the challenges of COVID-19, which I see as a crisis with an opportunity, most developed countries have introduced economic relief packages to re-inject dynamism and growth in their own economies.
"The United States of America introduced over $1 trillion stimulus package. The European Union has introduced $500 billion and may increase it to close to a $1 trillion.
"The USA also packaged $60 billion to its aviation sector in form of grants and loans. But many African countries do not have the monetary policy space, neither do they have the fiscal policy space to provide such substantial economic relieve packages, which means that for us as Africa, the implementation of the AfCFTA agreement is our own stimulus and economic relief package."
He also explained that an effective implementation of the free trade area agreement would significantly boosting intra-African trade and investments and stave off the severe contraction in the Gross Domestic Product (GDP) of between 2.5 and five per cent of the GDP that was predicted for the continent by the World Bank.
Mene added: "The AfCFTA is actually the driver of economic growth in Africa and a critical tool that we have in our disposal. As I said there are very few countries in Africa that can put on the table the substantial amount in stimulus packages that we have seen elsewhere. So this AfCFTA is Africa's stimulus and economic recovery plan."
He stated that the AfCFTA would liberate the continent from inhibitive trade policies of the western world that has consigned African countries as the producer and exporter of primary commodities with the imposition of 1000 per cent tariffs or more on the export of processed primary products like leather from Africa.
He also said the agreement would ignite industrialisation in the continent by encouraging member states to add value to their primary products and sell them within the continent at zero tariffs.
"What we require is an action plan for the implementation of an industrial development plan strategy across Africa in a disciplined manner over a number of years. This, to me, is the important factor as we implement the free trade agreement," he said.
He, however, stated that he was concerned about the difficult challenges member countries would face while implementing the agreement and playing by its rules in spite of the optimism and political will shown by African leaders at African Union's session about the AfCFTA.
"What I worry about is the inability or willful lack of compliance because sometimes conditions are difficult. The worry I have is the implementation and compliance with the rules.
"Where the bigger challenge will be is from the border (custom) officials in the remote parts of the member states and whether or not the officials will adhere to the rules that required them to apply the AfCFTA procedures. This is the number one concern for me," he said.
The secretary general of the AfCFTA secretariat said that the African Export-Import Bank (Afreximbank) has set aside $1 billion facility to assist countries that are state parties to the agreement, to cushion revenue losses they might suffer due to the implementation of the agreement.
The facility, according to him, would help countries to make the adjustments required by the transition and cushion the loss from revenue forgone from duties and tariffs, noting that "there will be winners and losers.
"There would be immediate winners from countries that already have industrial development capacity. Some countries will experience short to medium term revenue losses as a result of liberalising their trade, reducing tariffs and allowing imports into their markets.
"The Afreximbank has offered an adjustment facility of about $1 billion that will assist them," he said.
The virtual conference, according to the President of ABC, Mr. Dipo Faulkner, was called to address the concerns of private sector stakeholders as the continent marches toward the implementation of a free trade agreement.