Success of AfCTA depends on deploying energy of youth

At the opening session of the Annual Meetings of Afreximbank in Cairo, the Bank’s president, Prof. Benedict Oramah, stressed that with advent of the AfCFTA the tools were finally in place to end Africa’s dependence on exporting raw materials and that its success would depend on how the continent creatively deploys the energies and talents of the youth.

The 29th Africa Export-Import Bank (Afreximbank) Annual Meetings, held from 15th to 18th June, 2022, drew together around 3,000 participants in Cairo, Egypt. African central bank governors, policy makers and analysts as well as experts from all over the world deliberated on the theme “Realising the AfCFTA Potential in the Post COVID-19 Era – Leveraging the Power of the Youth”.

In his opening remarks, Prof. Benedict Okey Oramah, the President of the bank, made clear his appreciation of the tremendous support the bank enjoyed from the government of Egypt, and the Egyptian Central Bank.

He was also minded of the Egyptian Central Bank’s role in Afreximbank’s Central Banks Deposit Programme (CENDEP) which was allowing African central banks to more effectively deploy their reserves by enabling the Afreximbank to mobilise part of the foreign exchange reserves they held to fund trade and trade-related projects in Africa while providing them with favourable returns.

The initial deposits from Egypt and Nigeria encouraged other countries to join and eventually grow it into a $35bn programme with 50 participants from the continent.

Egypt has also partnered with the bank to train central and commercial bank staff in many areas and has also chosen it to advise on the creation of a national export credit agency.

Ensuring success of AfCFTA

Prof. Oramah recalled a recent article in the UK-based magazine The Economist which expressed worries that while the Africa Continental Free Trade Area represented hope for the end of the colonial economic model of exporting natural resources, the agreement had yielded no practical results due to on-going political wrangling.

Prof. Oramah said while the magazine was right about the facts, its conclusions were wrong. He explained that the facts were merely symptoms of a fundamental problem that was yet to be addressed.

During the colonial era, the colonising countries had privileged access to raw materials in the colonised countries, while they also had them as captive markets for their manufactures. This prevented the growth of local industry as well as trade with African neighbours.

But African leaders quickly sought to reverse the model, resolving at the very first meeting of the Organisation of African Unity to study the establishment of a free trade area, payment and clearing union. “While the problem was identified decades ago, it is only now that African can boast a combination of factors that can resolve it,” Prof. Oramah concluded.

The Afreximbank president also said the bank was designing instruments that are geared towards supporting small busi