The African Continental Free Trade Area (AfCFTA) has taken another major step towards realizing its vision of boosting intra-African trade and promoting economic growth on the continent. On March 10, 2023, the AfCFTA Secretariat and Afreximbank announced the launch of the AfCFTA Adjustment Fund in Kigali, Rwanda after the signing of the fund management agreement in relation to the Base Fund on 9th February 2022.
This historic initiative is a collaboration between Afreximbank and the AfCFTA Secretariat and will support African countries and the private sector to effectively participate in the new trading environment established under the AfCFTA Agreement. The AfCFTA Adjustment Fund is a game-changer for economic integration in Africa, and we are thrilled to be part of this important initiative.
The Adjustment Fund consists of a Base Fund, a General Fund, and a Credit Fund, which will work together to support African countries and the private sector in their adjustment process. The Base Fund will consist of contributions from State Parties, grants, and technical assistance funds to address tariff revenue losses as tariffs are progressively eliminated. It will also support countries to implement various provisions of the AfCFTA Agreement, its Protocols, and Annexes. The General Fund will mobilize concessional funding, while the Credit Fund will mobilize commercial funding to support both the public and private sectors, enabling them to adjust and take advantage of the opportunities created by the AfCFTA.
The resources required for the Adjustment Fund over the next 5-10 years are estimated at US$10 billion. Afreximbank has already committed $1 billion towards the AfCFTA Adjustment Fund, demonstrating its strong commitment to supporting economic integration and development in Africa.
This groundbreaking achievement positions Rwanda as a beacon of continental integration and showcases the commitment of the African Union (AU) and its member states to realizing the full potential of the AfCFTA. The launch of the AfCFTA Adjustment Fund is a clear demonstration of the AU’s commitment to supporting African countries and the private sector in their adjustment process to the new trading environment established under the AfCFTA.