Home Naijamerit News AfCFTA: PAPSS’ll reduce foreign currency requirement

AfCFTA: PAPSS’ll reduce foreign currency requirement


By Merit Ibe

The Secretary General of African Continental Free Trade Agreement (AfCFTA),Wamkele Mene, has  disclosed that the Pan African Payment & Settlement System (PAPSS) backed by Afreximbank would reduce the foreign currency requirement in African payments.

According to Mene, who made the remark  during AfCFTA secretariat 2nd quarterly press briefing, the trade agreement  has recorded some progress concerning the PAPSS, as payment transaction cost currently amounts to about $5billion each year. He said local banks would be able to switch to the platform at the end of the year. The Secretary clarified that the rules of origin would be based on tariff lines and not on value-addition.

On how a single West African Currency would affect the AfCFTA, the secretary noted that although it is hoped that Africa would sometime in the future become a single currency union, the proposed West African currency ECO can only have a similar effect on the AfCFTA as other payment platforms, which ease and facilitate trade.

He disclosed that the body has been engaging with the private sector in different parts of the continent to encourage them to spare head the sensitisation program since they stand to benefit the most from the agreement.

The secretary made mention of the need to engage partners for such peculiar issues as customs procedure, clearance of goods, and transportation all of which the secretariat cannot achieve alone, hence,the need to collaborate with the Union of African Shippers Council (UASC) whose members are conversant with the challenges to trade. The collaboration he noted, was to be formalised through a memorandum of understanding (MOU) between the two organisations. He said the MOU was an expression of partnership and an action plan with which the two bodies would work to achieve greater intra-African trade in the years to come.

Mene disclosed that  the Secretariat has in the intervening period worked towards the operationalisation of the dispute settlement mechanism covering all major trade areas such as trade in goods, investment, and intellectual property.

He noted that participating states were now in the process of nominating representatives, adding that such representatives would have to be experts in the international economy and conversant with trade laws.

This according to him, would expectedly create a more trade-friendly environment and foster intra-African trade.

Speaking further, the secretary-general noted that as of today, 40 nations had ratified the agreement while expressing optimism that Seychelles, DRC, and Burundi would submit their ratification by September.

“Meanwhile, efforts are being made also to enlist Tanzania which is regarded as a strategic nation, given that it is a large east African country.”

He further noted that Benin, Liberia, and Guinea-Bissau have not ratified the agreement but that the secretariat was inter-facing with them and creating an avenue through which their reservations can be addressed.

He said the council of Ministers had convened to discuss issues around the rules of origin and market access, and as of today 80% of the negotiations has been completed, while the target is 90%.

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Source: Nigerian Newspapers Online

Author: Naijamerit

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