Welcome to our second publication of the Overview of Agenda 2063 Flagship projects. In this publication we provide an overview of the flagship projects that have to do with Trade and Finance i.e. the famous and well publicised African Continental Free Trade Area, Establishment of the Africa Financial Institutions and less known Establishment of the African Commodities Strategy.
African Continental Free Trade Area (AfCFTA)
If there was a celebrity flagship project, then no doubt it would probably be this one. The AfCFTA has no doubt been promoted and hyped by media outlets all over the world and rightfully so because the AfCFTA agreement will create the largest free trade area in the world measured by the number of countries participating (Ref-1). Furthermore the success of other projects and initiatives will directly and indirectly contribute to boosting intra African trade of which is a key goal of the AfCFTA agreement.
The objective of the AfCFTA is to create a people-centered development continental Free Trade Area that will accelerate intra African trade and boost Africa’s trading position in the global market place. The AfCFTA aims to use trade more effectively as an engine for growth and as a means to address challenges that face hundreds of millions of Africans such as youth unemployment, migration, skills development, women’s empowerment, industrialisation and infrastructure development etc.
The short and long term goal of the AfCFTA is to create a continental market for goods and services, expand intra-African trade across African countries that have ratified the agreement and enhance competitiveness while supporting economic transformation (Ref-2).
African Commodity Strategy
Welcome to Africa. A poor continent with about 12% (oil reserves), 42% (gold), 80%-90% (Chromium and platinum), 60% (Arable land) of the world’s sought after resources (Ref-3). One of the billion “Afro” (we say “Afro” because one of the flagship projects has a mandate to establish an African currency which we have chosen to call Afro for now) questions of our generation revolves around how Africa can be so resource rich while majority of its people are poor and many denied access to basic amenities and a decent lifestyle.
The African commodity strategy flagship project is looking to address the ironies above by identifying and formulating policies and programmes, driving strategic measures that will address issues such as (commodities) price volatility. This flagship project aims to enable African countries to add value, extract higher rents from their commodities, integrate into global value chains and promote vertical and horizontal diversification anchored in value addition and local content development.
The Continental Financial Institutions
Agenda 2063 continental financial institutions comprises of four financial institutions i.e.
- The African Investment Bank (AIB)
- The African Monetary Fund (AMF)
- The Pan-African Stock Exchange (PASE)
- The African Central Bank (ACB)
These institutions are intended to accelerate the continent’s regional integration and socio economic development as they will play key roles in mobilising resources and management of the continental financial sectors (Ref-23).
African Investment Bank (AIB)
The African investment bank has a mandate to foster economic integration and development through investment in development projects in line with the objectives of the African Union. The AIB functions shall center around making finance available in accordance with banking principles, financing of public and private projects intended to advance regional economic integration of State Parties, providing support to and strengthening private sector endeavors and offering assistance in the modernisation of rural sector in low-income State Parties.
The AIB which will be headquartered in Triploli, Libya will also provide technical assistance and other Stakeholders for the study, preparation and implementation of investment projects as well as engage in other activities and services that may advance the purpose thereof (Ref-24).
African Monetary Fund (AMF)
The mandate of the AMF is to facilitate the effective and predictable integration of African economies. To do this, the AMF aims to foster macroeconomic stability, achieve sustainable shared economic growth and balanced development across State Parties.
The AMF aims to assist State Parties with macroeconomic factors that hinder economic growth such as correcting the disequilibria in balances of payments, stabilising exchange rates among currencies and their mutual convertibility (i.e. between base and quote currencies), promote African monetary cooperation and inherently achieve African economic integration.
The AMF also is looking to tackle the issue of debt by reinforcing capacity building in the design and implementation of debt management policies in state parties. It will also work towards the facilitation of settlement of commercial debts and establishment of a intra African transaction clearing system amongst State Parties so as to boost intra African trade and encourage capital flow between State Parties.
The AMF will be headquartered in Yaounde Cameroon.
Pan African Stock Exchange (PASE)
A request to conduct a feasibility study on the creation of a PASE was tabled at an AU summit in 2006. While it is unclear what the outcome of this feasibility study was, more recently in an effort to fast track the integration of African Securities exchanges, the AU commission finalised the negotiation of a Memorandum of Understanding (MOU) with the African Securities Exchange Association (ASEA), an association of 27 securities exchanges in Africa. The MOU allows for collaboration between the two parties to work together and fast track the implementation of the Pan African Stock Exchange.
It is also important to mention another project within ASEA that compliments and aligns with the PASE, i.e. the African Exchanges Linkages Project (AELP). The AELP is a joint initiative between ASEA and the African Development Bank (AfDB) which seeks to facilitate cross-border trading and settlement of securities in Africa. In its initial phase, the project will create linkages between seven African stock exchanges that cut across 14 State Parties which account for over 85% of Africa’s market capitalisation (Ref-25). These stock exchanges are:
- Bourse Régionale des Valeurs Mobilières (BRVM) [Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo]
- Casablanca Stock Exchange (CSE) [Morocco]
- The Egyptian Stock Exchange (EGX) [Egypt]
- JSE (formerly known as Johannesburg Stock Exchange) [South Africa]
- Nairobi Securities Exchange (NSE) [Kenya]
- The Nigerian Stock Exchange [Nigeria]
- Stock Exchange of Mauritius (SEM) [Mauritius]
The AELP furthers the cause of boosting intra African Trade and investment and will include other African stock exchanges in later phases of the project and given the MOU between ASEA and the AU for the PASE, in the context of an ongoing AELP, here at panafreeka, we believe that it is not too unrealistic to imagine a future where the PASE is a front end of the AELP.
African Central Bank (ACB)
Like other financial institutions, the African Central Bank goal is to further the cause of accelerating economic integration. The ACB aims to achieve this by a mandate centered around building a common monetary policy as well creating and managing a single African currency.
Additional objectives of the ACB will be to promote international monetary cooperation, eliminate foreign exchange restrictions that hamper growth of world trades and promote exchange rate stability while attempting to avoid exchange rates depreciation. The proposed headquarters of the ACB will be Abuja, Nigeria.
References (Ref)
- https://www.worldbank.org/en/topic/trade/publication/the-african-continental-free-trade-area
- AfCFTA a tralac guide 6th edition November 2019
- https://www.questia.com/magazine/1G1-530107183/african-commodities-strategy-value-addition-for-global
- The Single African Air Transport Market – PIDA
- https://www.nepad.org/agenda-2063/flagship-project/continental-high-speed-train-network
- https://www.youtube.com/watch?v=hS9sPp0H5F8&feature=emb_logo
- https://au.int/en/pressreleases/20181214/auc-convenes-pan-african-e-network-paen-assembly-parties
- https://www.pambazuka.org/pan-africanism/africa-pan-african-e-network-model-“south-south-cooperation”
- First Continental Report on the Implementation of Agenda 2063 February 2020 – African Union (AU) and African Union Development Agency (AUDA-NEPAD)
- https://ccdcoe.org/organisations/au/
- https://www.internetsociety.org/resources/doc/2018/personal-data-protection-guidelines-for-africa/
- https://au.int/en/pressreleases/20191212/african-union-cybersecurity-expert-group-holds-its-first-inaugural-meeting
- https://au.int/en/newsevents/20191220/official-launch-pan-african-virtual-and-e-university-paveu
- African Space Policy – African Union (HRST/STC-EST/Exp./15 (II)
- https://www.africaportal.org/features/creating-greater-inclusion-african-space-agency/
- Statute of the African Space Agency (Article 2)
- https://au.int/en/agenda2063/flagship-projects
- Silencing the Gune, Owning the Future: Realising a conflict-free Africa – ACCORD (African Centre for the Constructive Resolution of Disputes)
- https://gga.org/silencing-the-guns/
- https://au.int/sites/default/files/newsevents/reports/37472-rp-pa25606_e_original_004_ff.pdf
- https://au.int/sites/default/files/pressreleases/31182-pr-pr_20_-_african_union_passport_launched_during_opening_of_27th_au_summit_in_kigali.pdf
- https://au.int/sites/default/files/newsevents/workingdocuments/35139-wd-guidelinesfinal_copy_2_1-edited_final_version.pdf
- https://au.int/en/financial-institutions
- https://au.int/sites/default/files/treaties/36414-treaty-0038_-_protocol_on_the_african_investment_bank_e.pdf
- https://www.african-markets.com/en/news/africa/focus-on-the-african-exchanges-linkage-project-aelp
- Agenda 2063 First Ten Year Implementation Plan 2014-2023 – The African Union Commission
- African Economic Platform Report (Mauritius, 20-22 March 2017)
- https://www.au-pida.org/view-project/324/
- Department of Energy Republic of South Africa – Grand Inga Treaty
- ADOPTION OF THE ENCYCLOPAEDIA AFRICANA PROJECT (EAP) – African Union Assemble 22nd Ordinary session (30-31 January 2014)
- ENCYCLOPAEDIA AFRICANA PROJECT – DOCUMENTING AFRICAN HISTORY TOWARDS DURABLE SOLUTIONS TO AFRICAN CHALLENGES INCLUDING FORCED DISPLACEMENT – 34th Ordinary session of the Executive Council (07-08 February 2019)
For more information relating to the free trade area click the useful Links (UL) below:
- https://afcac.org/en/images/Documentation/yd_eng.pdf
- https://www.nepad.org/agenda-2063/flagship-project/african-commodity-strategy
- https://www.nepad.org/agenda-2063/flagship-project/african-continental-free-trade-area-afcfta
- https://www.questia.com/magazine/1G1-530107183/african-commodities-strategy-value-addition-for-global
- https://au.int/sites/default/files/newsevents/workingdocuments/33100-wd-6a-brochure_on_single_african_air_transport_market_english.pdf
- https://afcac.org/en/images/Documentation/yd_eng.pdf
- https://www.tralac.org/documents/resources/african-union/1506-the-single-african-air-transport-market-pida-brochure-2017/file.html
- https://au.int/sites/default/files/newsevents/workingdocuments/38223-wd-progress_report_on_the_implemenation_of_agenda_2063_eng.pdf
- https://au.int/en/treaties/african-union-convention-cyber-security-and-personal-data-protection
- https://pau-au.africa
- https://au.int/sites/default/files/treaties/36403-treaty-protocol_on_free_movement_of_persons_in_africa_e.pdf
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