Mauritius hosted the Africa Partnership Conference 2023 on October 2 and 3, where Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, delivered a keynote address.
In his speech, Mene highlighted the influence of the AfCFTA Agreement on intra-African investments and introduced the new Protocol on Investment.
This protocol, he said, marks a significant milestone on the path toward fostering economic integration and fostering growth throughout the African continent.
One of the highlights Mene’s address was the adoption of the Protocol on Investment by the Assembly of Heads of State and Government of the African Union in February 2023.
This protocol represents a monumental shift in how intra-African investment will take place, as it introduces a unified set of rules encompassing investment facilitation, dispute settlement, and innovation.
What the protocol means
Previously, lack of standardised regulations and dispute resolution mechanisms hindered intra-African investment.
With the protocol in place, investors will now benefit from a more transparent and predictable investment environment.
This, in turn, is set to boost investor confidence and encourage more investments within the continent.
Mene further emphasized that the protocol is a crucial tool for attracting and safeguarding investments. It will not only reduce compliance costs but also enhance efficiency in cross-border investments.
By establishing a level playing field for investors across African nations, the protocol sets the stage for a surge in job creation and positions Africa as an attractive destination for investments.
Beyond the Protocol on Investment, the AfCFTA Agreement also envisions the harmonisation of regulations and standards across the continent.
This is set to be a powerful catalyst for investment flows. When regulations and standards align, it becomes easier for businesses to operate across borders, leading to high investments and trade.
The harmonisation process will not only enhance economic cooperation but also ensure that businesses can navigate the complex web of regulations in different African countries with ease.
This, in turn, will facilitate the growth of both small and large enterprises, spurring economic development across the continent.
AfCFTA Supporting Prosperity
While the Protocol on Investment represents a monumental step forward, the AfCFTA Adjustment Fund is another vital component of the agreement that must not be overlooked.
The inaugural meeting of the Board of the AfCFTA Adjustment Fund, that took place on September 29th in Kigali, Rwanda, marked a significant milestone in the AfCFTA’s implementation.
While giving his remarks, Mene stated that the Adjustment fund will collaborate with African Export-Import Bank (Afreximbank), the Adjustment Fund aims to provide essential support to State Parties and private entities.
“In partnership with Afreximbank, we intend to provide the required support to State Parties and private entities through the Fund, to mitigate short falls in revenue mobilisation due to reduced tariffs & to also boost productive capacities on the continent,” Mene stated
This initiative is poised to have a profound impact on Africa’s economic resilience and growth.
By cushioning the fiscal impact of reduced tariffs, the AfCFTA Adjustment Fund ensures that African nations can maintain essential public services while they transition to the new trade regime.
This stability will help create a conducive environment for businesses to flourish, attract investments, and contribute to the continent’s development.