AfricaNenda Policy Note 1
25 May 2023
Background: Accelerating digital financial inclusion in Africa for the realization of the African Continental Free Trade Area.
The African Continental Free Trade Area (AfCFTA) aims at accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.1 The successful implementation of the AfCFTA is intended to reduce trade barriers, leading to an increase in Africa’s income by $450 billion by 2035.2 Other benefits include creating more decent jobs, improved welfare and better quality of life for all Africans, and sustainable socioeconomic development.
Digital Trade was included in the AfCFTA Agreement through a decision of the African Union Heads of State and Government Assembly in February 2020 and is being implemented through negotiations. It is a fundamental component of the Agenda 2063, essential to boosting intra-Africa trade through expanded African markets for traders on the continent. This is in considering how the COVID-19 pandemic unlocked the demand for digital trading opportunities, and increasingly, more businesses continue adopting virtual business environments.
Successful implementation of the Digital Trade protocol of the AfCFTA mandate needs a thriving and more inclusive financial system, where significant value is to be unlocked for traders by enabling them to make or receive payments seamlessly in a manner that provides incentives, improves working capital through cost reduction, and drives the efficiency of payment processes.