Africa’s export performance is poor despite lower tariffs and freer access to foreign markets. The weaknesses of Africa’s export performance are mainly linked to weaknesses in the political economy of trade-related policy reforms, institutional development and supply constraints related to infrastructure and logistics.
The Africa Trade Fund was established by the African Development Bank in March 2012, with seed financing from the Government of Canada. AfTra is a trade-related, multi-million dollar technical assistance facility with the objective to accelerate the integration of Regional Member Countries (RMCs) and Regional Economic Communities (RECs) in regional and global trading systems.
Resources under AfTra will be used to support the growing impetus for regional economic integration and expanded trade opportunities for Regional Member Countries. It will complement the Bank’s existing resources to Regional Member Countries and leverage the Bank’s operations in regional integration and priority sectors such as agriculture, infrastructure, governance, private sector development, as well as science and technology.
AfTra will focus on the following four pillars:
- Pillar I: Improving trade facilitation in RMCs and RECs: The Fund will leverage technical assistance to support implementation of RMCs and RECs Trade Action Plans;
- Pillar II: Product and Marketing Development: Improving product quality (in line with international standards) and enhancing market access;
- Pillar III: Strengthening country and regional trade-related institutions and systems: Build strong institutions with knowledgeable staff to support trade facilitations systems;
- Pillar IV: Increasing the Bank’s internal capacity to provide enhanced advisory services and effectively support trade development in RMCs.
AfTra is currently one of the largest trade-related technical assistance financing facilities on the continent. It was created out of a realization that it was not sufficient to simply address physical infrastructure constraints to trade. To truly bring about changes in Africa’s trading landscape, it is equally important to tackle soft infrastructure issues such as trade facilitation.
AfTra will prioritize its areas of intervention, while at the same time building internal expertise to ensure quality delivery throughout the cycle. The fund will facilitate trade and enable African countries access opportunities available on and to the continent.