Afrexim pushes for Africa trade bloc as protectionism bites

President William Ruto sahkes hands with Prof Benedict Oramah, the president of AfriExim Bank after the signing of the Sh400 billion financing program between Kenya and AfriExim Bank at State House Nairobi on Tuesday May 2, 2023. [PCS]

The African Export-Import Bank (Afreximbank) is urging African nations to aggressively pursue internal trade integration through the African Continental Free Trade Area (AfCFTA) as a critical buffer against a rising tide of global protectionism.

The multilateral lender views the swift operationalisation and deepening of the pan-African trade bloc, encompassing 54 of the 55 African Union member states, as essential to shield the continent's economies from escalating tariff hikes and disrupted global supply chains.

Speaking at the inaugural FOCUS Africa Trade and Investment Forum in Cairo, Afreximbank President Prof Benedict Oramah painted a stark picture of the global economic landscape, stating that "globalisation, as we know it, is regrettably under life support."

His remarks underscore a growing consensus among African leaders that the era of unfettered international commerce is being eroded by protectionist policies, including tariffs imposed by major economies like the United States on some African nations, including Kenya.

Oramah asserted that the AfCFTA offers Africa a vital pathway to foster self-reliance and unlock its substantial internal market potential, effectively creating its own "internal globalisation."

He highlighted the fact that despite a combined GDP exceeding $3.1 trillion and a market of 1.4 billion people, intra-African trade currently accounts for a mere 15 per cent of the continent's total trade, indicating significant untapped potential.

Despite global headwinds and fading multilateralism, Prof Oramah underscored Afreximbank's commitment to transforming Africa from "the inside out."

Through platforms like the Intra-African Trade Fair IATF, the Pan-African Payment & Settlement System - PAPSS, and the Africa Trade Gateway, he said the Bank is enabling real trade, real investment, and real development across the continent.

Afreximbank-backed programmes like Intra-Champs, Fund for Export Development in Africa (FEDA), and the Industrial Parks partnership with ARISE IIP are equipping African businesses to lead industrialisation, tackle infrastructure gaps, and drive sustainable growth, he said.

He added that with harmonised standards, transit guarantees, and quality infrastructure rolling out across countries, the Bank is not just financing transactions, but it's reshaping Africa's trade architecture.

Africa's future lies in intra-African trade, investment, and shared prosperity, he said, adding, "The time to act is now."

Speaking at the event, Egypt's Minister of Planning, Dr Rania Al-Mashat, echoed this sentiment, emphasising the unprecedented opportunities presented by the AfCFTA.

She outlined Egypt's commitment to attracting both African direct investment (ADI) and foreign direct investment (FDI) through ongoing reforms aimed at enhancing the business climate.

The FOCUS Africa forum, co-hosted by Afreximbank, the Egyptian government, and African ambassadors in Cairo, aims to galvanise investment and trade within the continent.

Discussions are centred on leveraging the AfCFTA to unlock opportunities in key sectors such as agribusiness, technology, infrastructure, and manufacturing.

Afreximbank is actively supporting the AfCFTA through initiatives like the Pan-African Payment and Settlement System (PAPSS) and a $10 billion Adjustment Fund.

The bank's Executive Vice President for Intra-African Trade, Mrs Kanayo Awani, emphasised that bridging Africa's infrastructure gap is crucial for enhancing global competitiveness and that the forum aims to foster strategic partnerships and innovative financial solutions to achieve this.