The first disbursements of the Africa Continental Free Trade Area (AfCFTA) Adjustment Fund are expected early next year, Secretary General of the AfCFTA Secretariat, Wamkele Menerevealed in Kigali.
Mene was speaking at the second edition of the AfCFTA Business Forum, dubbed ‘Biashara Afrika’ in Kigali.
The $10 billion Fund, headquartered in Rwanda, was established in 2023 by the African Export-Import Bank (Afreximbank), AfCFTA Secretariat and the African Union Commission (AUC), following a mandate from the African Union (AU) Summit of Heads of State and Governments.
So far, $1 billion has been raised, an amount the Secretary General said is not enough considering the size of the continent.
"A billion dollars for a continent as big as ours is obviously not much, but it is a good start. We will have to mobilise more development finance institutions, commercial banks, private equity firms and the private sector to invest particularly in the credit pillar of the fund," Wamkele said during a press briefing.
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The Secretary General added that the AfCFTA Secretariat and Afreximbank will go on a road show to engage investors across the continent to invest in the fund.
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.
The Fund will also help to address the infrastructure deficits and supply chain bottlenecks to the implementation of the African Continental Free Trade Agreement.
The eligibility criteria for the fund, according to the Secretary General, will be determined by Ministers of Trade from AfCFTA State Parties, the Board and the Credit Sub-Committee of the Board.
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The fund which is managed by the Fund for Export Development in Africa (FEDA)–an impact investment arm of Afreximbank, consists of three sub-funds: The Base Fund, the General Fund, and the Credit Fund.
Mene noted that the Fund, which is a form of blended finance consisting of grants and concessional loans, will be accessible to both Sovereigns and private sector players.
Mene also reiterated that the Fund will have operational independence, devoid of any influence.
Apart from the Adjustment fund, the Biashara Afrika forum, which kicked off on October 9, will discuss the structural and policy challenges that need to be addressed so as to increase the production of value-added goods and services as well as how to unlock investment opportunities for key infrastructure and supply chain corridors.