AfCFTA: Disbursement of $1bn Adjustment Fund expected to commence early 2025

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The African Continental Free Trade Area (AfCFTA) is expected to commence the disbursement of its adjustment fund to Ghana or any other member state that will express interest in taking advantage of the gamut of financing options available under the initiative.

The AfCFTA Adjustment Fund was designed to provide short to medium-term financial support to State Parties and eligible private sector projects that may be adversely affected by declining fiscal revenues as a result of tariff reductions and reduced competitiveness arising from trade liberalisation.

The Secretary General of the AfCFTA, Wamkele Mene at a news conference to herald the Biashara Afrika Summit in Rwanda told journalists that his outfit has mobilised raised $1 billion of capital injection into the fund with plans underway to meet the target of $10 billion.

“There have been a number of meetings and engagements that the board, including some of the subcommittees of the board, such as the credit fund, have been meeting. We expect that the first disbursement will be early next year,” the Secretary-General stated adding that “we expect that it will be both governments and the private sector that seek support.”

The AfCFTA Adjustment Fund will have a semblance of blended finance that will include grants, concessional loans and other financing options that will help to shore up the investment needs of eligible actors both from the sovereign domain and the private sector.

Responding to a question on the disbursement formula, Wamkele Mene noted that “It is up to the fund to decide how to deploy the capital. Although we are a board member and we are in a partnership with an African bank and the fund, we want the fund to operate at arm’s length, to have operational independence so that it can function without interference by any of us”.

Given this, Secretary-General Mene further explained that the fund will remain open to all member states whether or not the country has started trading under the rules of the AfCFTA.

“Where a country or even a private sector identifies specific opportunities or specific interests, let us say to start a manufacturing capacity for components of a vehicle to supply Toyota.

This is the kind of productive activity and manufacturing activity that we envisage the fund to support. So early next year is where we expect that the disbursements will commence”.

A board meeting on the Adjustment Fund is scheduled to take place in Rwanda this week where AfCFTA Secretariat believes that all the associated matters related to the preparation for the disbursement and mobilisation of more funds will be discussed.

This, the Secretary-General explains will pave the way for a roadshow that will seek to draw more investments for the fund.

The Biashara Afrika Summit hosted by the Republic of Rwanda is seeking to drive more investments for the successful implantation of the African Continental Free Trade Area.

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