AfCFTA Prepares for $1 Billion First Disbursement From Targeted $10 Billion Adjustment Fund

The African Continental Free Trade Area (AfCFTA) is set to begin the disbursement of its Adjustment Fund early next year, targeting both sovereign states and private sector projects impacted by the bloc’s trade liberalization. The fund, which has already secured $1 billion in capital and aims to raise a total of $10 billion, is designed to cushion member states against revenue losses stemming from tariff reductions and diminished competitiveness.

AfCFTA Secretary-General Wamkele Mene, speaking at a press briefing ahead of the Biashara Afrika Summit in Rwanda, confirmed that the first tranche of disbursements will be available early next year, with governments and private sector players eligible for support. “We expect that both governments and the private sector will seek financing,” Mene said, emphasizing the flexibility of the fund in addressing a broad range of economic needs.

The Adjustment Fund will feature a combination of grants, concessional loans, and other financing mechanisms to facilitate investment in areas such as manufacturing, infrastructure, and industrial development. These instruments are intended to shore up projects adversely affected by the removal of trade barriers, as well as to support initiatives that align with AfCFTA’s broader goals of economic integration and industrialization.

Responding to questions on the allocation process, Mene stressed that the fund’s operations would remain independent to avoid any political interference. “It is up to the fund to decide how to deploy the capital. While we are a board member, we want it to operate at arm’s length to maintain operational independence,” he remarked.

The fund will be open to all AfCFTA members, regardless of whether they have commenced trading under the agreement. Mene noted that it would support projects like the establishment of manufacturing facilities to supply multinational corporations, citing the example of producing components for companies such as Toyota.

A key board meeting in Rwanda this week will address final preparations for the fund’s deployment and discuss further capital mobilization. The Secretary-General hinted at a roadshow to attract additional investments, positioning the fund as a critical element in AfCFTA’s ambition to drive industrial growth across the continent.

The Biashara Afrika Summit, hosted by Rwanda, will focus on attracting investment to ensure the successful implementation of the AfCFTA, underscoring the region’s commitment to making the free trade area a linchpin of Africa’s economic future.

Source:norvanreports.com