Luanda - The African Continental Free Trade Area (AfCFTA) will create a platform for an adjusted Pan-African payment system, via instant transactions, thus reducing the costs of currency conversion.
According to the secretary-general of AfCFTA, Wamkele Mene, who was speaking on Wednesday at the workshop on "The prospects of regional integration in the African Continental Free Trade Area," the costs of currency convertibility leads the continent to lose about US$5 billion annually in revenue.
"Africa has about 42 types of currencies and we know that the cost of currency conversion is quite high. If we want to make a transaction from Angola to Kenya, first we have to convert the kwanza (Angolan currency) to the US dollar and then to Kenyan currency," he said.
He noted that this process contributed to market inefficiency and to the cost of the product.
On the other hand, he said, the aim of the AfCFTA secretariat is to propose the implementation of the free economic zone adjustment fund, with an initial value of US$1 billion, to support countries that depend on tariff collection.
He pointed out that these are the medium-term measures regarding the elimination of tariff taxes.
"What we should work on, as a continent, is not to use tariffs as a revenue generator, but to look at tools for industrialisation. That is the change we will have to make in the coming years," he advocated.
By joining the continental market for commercial transactions, the country will have access to a market that will increase from 30 million to 1.3 billion people.
Angola is actively participating in the negotiations for the agreement's operationalisation and in the next few days is due to send the African Union Commission the Draft Tariff Offer for the AfCFTA, and, for trade in services, a basic offer may also be sent after its approval.
