More than 30 African countries are taking part in the African Continental Free Trade Area’s (AfCFTA) expanded trade pilot scheme.

Last year an initial seven countries tested the scheme using processed agricultural products and manufactured goods, reports Moneyweb.

Uganda, for example exported 2 billion litres of milk to Algeria, while a Ghana manufacturer exported its ceramic tiles to Cameroon, AfCFTA secretary-general Wamkele Mene announced at a WEF panel in Davos recently.

Mene said the AfCFTA enabled a 20% reduction in duty. ‘That is 20% competitiveness as of the start of trade,’ he pointed out.

The expanded trial will now see 31 countries put the AfCFTA’s new pan-African payments and settlement system through its paces. The system’s use of local currencies is expected to overcome the shortage of foreign currency in some countries and the limitations of having to convert currencies.

Speaking at the WEF, Mary Vilakazi, the new CEO of South African financial services provider FirstRand, said the need for African traders to access foreign currencies translated into costs of ‘about US$5 billion a year, which actually could go back into the economies’.

23 January 2024
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