AfCFTA Secretariat, Afreximbank sign Adjustment Fund host country agreement with Rwanda
Rwanda has signed an agreement to host the African Continental Free Trade Agreement (AfCFTA) Adjustment Fund. The Fund will support AfCFTA State Parties to adjust smoothly to the new liberalised and integrated trading environment established under the Agreement by mitigating the potential adverse impacts of AfCFTA-induced tariff revenue losses.
The Fund will also help to address the infrastructure deficits and supply chain bottlenecks to the implementation of the AfCFTA.
The agreement was signed by the AfCFTA Secretariat and African Export-Import Bank (Afreximbank) with Rwanda, on March 10, 2023 in Kigali.
A press release from the Afreximbank copied to Ghana Business News says, the $10 billion Fund, is a critical instrument in the realisation of the AfCFTA.
“It will help countries to implement agreed protocols and support African companies to retool for effective participation in the new trading regime. The AfCFTA Adjustment Fund will support AfCFTA State Parties to adjust smoothly to the new liberalised and integrated trading environment established under the AfCFTA Agreement by mitigating the potential adverse impacts of AfCFTA-induced tariff revenue losses,” it said.
The Fund for Export Development in Africa (FEDA), the impact investment arm of Afreximbank, headquartered in Kigali-Rwanda, has been selected as the Fund Manager of the AfCFTA Adjustment Fund, the release said.
The Fund established by the Afreximbank, AfCFTA Secretariat and the African Union Commission (AUC) following a mandate from the African Union (AU) Summit of Heads of State and Governments, consists of three sub-Funds, namely, the Base Fund, the General Fund, and the Credit Fund.
“The Base Fund will utilise contributions from AfCFTA State Parties as well as grants and technical assistance to address AfCFTA-induced tariff revenue losses. It will also support countries to implement the various Protocols under the AfCFTA. The General Fund will mobilise concessional finance to support the development of trade-enabling infrastructure and execution of key industrialisation initiatives, while the Credit Fund will be used to mobilise commercial funding to support both the public and private sectors enabling them to adjust and take advantage of the opportunities created by the AfCFTA,” it added.
The Agreement, signed by H.E. Wamkele Mene, Secretary-General of the AfCFTA Secretariat; Mrs Kanayo Awani, Executive Vice President, Intra-African Trade Bank at Afreximbank; and Dr Vincent Biruta, Minister of Foreign Affairs, and International Cooperation of the Republic of Rwanda, paves the way for the operationalisation of the AfCFTA Adjustment Fund.