The successful implementation of the African Continental Free Trade Agreement (AfCFTA), will need a well-regulated African financial infrastructure, efficient and resilient payment systems, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said.
That, he said, would eliminate the use of third currency for settlement, improve liquidity and cost of transaction.
Dr Addison stated this in a speech read on his behalf at the opening of a regional course on economic issues in regional integration of AfCFTA in Accra yesterday and stressed that African nations, and the Economic Community of West African States (ECOWAS) sub-region, in particular, had a significant role to play in the success of AfCFTA.
The one-week programme, organised by West African Institute for Financial and Economic Management (WAIFEM) is being attended more than policy makers, and state officials responsible for the promotion of AfCFTA.
The course is meant to enhance the knowledge of the participants on the general and specific issues relating to the Regional Economic Integration process in the WAIFEM member countries, particularly in the context of AfCFTA implementation.
It is meant to build the capacity on AfCFTA issues to deepen trade and promote African integration.
“There is a great deal of work to be done in deepening capital market integration, harmonising the legal and regulatory frameworks of the banking and financial sector, harmonising legislations, and cross-border payment system integration,” he said.
Dr Addison said Ghana had taken concrete steps to transform its payments systems through innovation, competition and digitisation.
He said the automation of the payment systems platforms across the financial sector, including financial technology firms, following the passage of the Payment Systems and Services Act 2019 (Act 987) had brought about significant enhancement in the payment system landscape.
“There is the need to bring into alignment the AfCFTA framework with the World Trade Organisations agreement and other subsisting trade agreements within Africa and other parts of the world to create a virtuous cycle of regional integration and transformative trade regimes,” Dr Addison said.
The governor said it was envisaged AfCFTA would embrace all 54 African nations with an estimated combined Gross Domestic of $2.5 trillion and a population of more than 1.2 billion, making it the largest trading block.
“UNECA… estimates that by 2040, AfCFTA will enhance intra-African trade by 15 per cent to 25 per cent. The World Bank estimates that the implementing AfCFTA would provide the impetus for lifting an additional 30 million Africans from extreme poverty and greatly enhance the income of over 60 million above the poverty line,” Dr Addison, said.
The Director-General of WAIFEM, Dr Baba Yusuf Musa, in his remarks, said the course was to broaden the understanding of the participants on economic, monetary, financial integration and its impact on trade, investment and economic growth within the sub-region.
“The course draws on the analytical, conceptual and theoretical perspectives, as well as, case studies from experiences worldwide,” he said.
Dr Musa said African policymakers had long seen Regional Economic Integration as a mechanism for fostering economic growth, diversification and prosperity, and therefore, formed regional integration groups such as ECOWAS.
“The AfCFTA is the culmination of these initiatives and promises to be the largest free trade areas in the world,” he said.
BY KINGSLEY ASARE
