A major challenge is that most businesses encounter higher tariffs for exporting within than outside the African continent. The arduous visa requirements and export duties demanded across borders are enough to discourage intra-African trade. Building a trans-African highway network system will take years to complete but there has to be an efficient mode of transportation for intra-African trade to occur. If not properly addressed, there would be more goods than the means of transportation across the continent.

The high level of importation has left several African countries with negative trade balances. Shortage in the number of standardized manufacturing plants within the continent is saddening. Most manufacturing industries are either foreign-owned, redundant or cannot process very large quantities into consumable goods.

African governments have to invest heavily to resuscitate the production and manufacturing sector to create employment for the locals and ensure that quality goods are manufactured. Governments have to ensure that the manufacturing companies for the AfCFTA are not multinationals because it would be unfair competition to local manufacturers. The rules of origin can help prevent the transhipment of goods and foreign companies from taking advantage of zero tariffs.

Furthermore, there is an uneven distribution of populations amongst African countries. Some countries also have an unfair advantage of numbers over others in market size and landmass. These factors have to be considered before setting transactional and regulatory duties. There are concerns regarding uneven economic gains of the agreement such as tariff losses and the cost of adjustment to a competitive environment. Some countries, for example, depend solely on the fiscal revenues generated on tariffs, eliminating these would constitute a huge loss of revenue.

For smooth transactions between the countries, there would be a need for increased cooperation on rules of origin, harmonization of custom tariffs, trade facilitation and setting up phytosanitary measures regarding the standard of goods traded. There is a need for government sensitization so that citizens can benefit from the opportunities presented by this agreement. Business owners should also be aware of fraudulent acts and avoid exporting counterfeit goods from respective countries.

The concerns about the AfCFTA are genuine and have to be addressed for seamless trade facilitation within the continent. Pan-African financial institutions like the African Development Bank and the African Export-Import Bank (Afreximbank) are contributing their quota to foster trade-relations in the region. Afreximbank has set aside a $1 billion AfCFTA Adjustment Facility to enable countries to adjust to the sudden tariff revenue losses as a result of the implementation. These and more are essential for Africa to be truly ready to implement and enjoy the full benefits of the free trade agreement.

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AfDB Head Office, Abuja. Photo Credit: newtelegraphonline.com

The European Investment Bank, EIB and the African Development Bank, AfDB have sealed a deal to to fund the establishment of the new Development Bank of Nigeria (DBN) to reinforce agriculture investment and loaning for business in Nigeria to the tune of $70 million.

EIB likewise settled a $20 million equity stake in the new financing institution, alongside US $50 million value support from the African Development Bank.

According to the Managing Director of the Development Bank of Nigeria, Tony Okpanachi, “the Development Bank of Nigeria will overcome the funding gap in the micro-, small- and medium-scale enterprises space and help businesses unlock opportunities across Nigeria. DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and African Development Bank. The new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private-sector investment across Africa and around the world where other financing options are inadequate or absent.” He explained.

The agreement was reached by EIB’s Anne-Cécile Auguin and AfDB’a Emeka Anuforo at the World Bank 2018 Spring Meetings in Washington DC.

The Vice-President of the European Investment Bank (EIB) Ambroise Fayolle, also “New private sector investment is crucial to create jobs and enable business to expand and limited access to long-term financing holds back economic growth. The European Investment Bank is pleased to support the new Development Bank of Nigeria to strengthen private-sector investment in Africa’s largest economy. We look forward to continued close cooperation with Nigerian and international partners to ensure that once fully operational the new Development Bank of Nigeria can help harness the country’s economic potential,” he said.

The Head of the European Union Delegation to Nigeria and the Economic Community of West African States (ECOWAS) Ambassador Ketil Karlsen, emphasized the responsibilities of the EU in supporting private-sector investment in Nigeria.

“The new backing for the Development Bank of Nigeria by both the European Investment Bank, the bank of the European Union and the African Development Bank, with 13 EU member state shareholders, will make a clear contribution to tackling the lack of access to credit by entrepreneurs and businesses across the country. With more investment, we hope to promote a vibrant economy and stimulate growth, employment and increase opportunities, especially for youth.” He said.

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As part of its commitment to promote agribusiness in Africa, the African Development Bank’s (AfDB) has signed a $200 million Soft Commodity Finance Facility agreement with an agricultural supply chain firms, Export Trading Group.

This was contained in a communique released by the bank late last week, said the facility will benefit 17 African countries, and it is structured to run as two successive loans of $100 million each with a tenor of up to two years.

The bank aims at helping local farmers and soft commodity manufacturers to produce quality goods that are viable for export.

Speaking at the signing ceremony, AfDB Director General for the Southern Africa Region, Josephine Ngure said the deal would contribute to improving food production in Africa and also add value to it.

She further added that the facility will also contribute to smallholder farmers’ access to inputs. These include seeds and fertilizers, mechanization as well as access to international markets. As a result, farmers will be able to garner significant revenues.

This, in turn, will lead to sustainable process of economic growth and development as well as regional integration through the development of sustainable platforms to supply local and regional markets.

What you should know about ETG

ETG connect farmers with consumer 

ETG connects commodities sourced at farm gate to neighbourhood economies; nearby economies to the more extensive marketplace; and developing markets to each other and the world.

Established in Kenya in 1967, ETG has risen as one of Africa’s biggest Farming Aggregates. ETG’s impression grows crosswise over sub-Saharan Africa, North America, Europe, the middle East and South East Asian nations.

ETG activities include facilitation of production of high quality crops, propagating value addition, providing a market for all tradeable surplus commodities and provide consumers with a range of quality yet affordable branded products.

The post AfDB Signs Over $200m Deal with ETG to Promote Agriculture in Africa appeared first on MTFC | Meet The Farmers Conference - Nov 2019 - Dubai UAE.