The grant, which is part of Afreximbank’s effort to promote intra-African trade and support the implementation of the African Continental Free Trade Area (AfCFTA), was announced during a ceremony on the sidelines of the AfCFTA Business Forum organised as part of the African Union’s Summit of Heads of State being held to mark the implementation phase of the AfCFT.
The grant agreement was signed in Cairo on 24 June by Kanayo Awani, Managing Director of Afreximbank’s Intra-African Trade Initiative, and Dr Vera Songwe, Executive Secretary of UNECA.
Speaking during the grant announcement ceremony, Ms. Awani noted that the Abidjan-Lagos Corridor connects the major urban centres of five countries in the Economic Community of West African States (ECOWAS), namely Benin, Cote d’Ivoire, Ghana, Nigeria and Togo, and said that ICBT could play a key role toward the attainment of the structural transformation and poverty reduction objectives contained in the AU’s Agenda 2063: The Africa We Want.
Ms. Awani explained that the informal economy employed the majority of Africans and that a large proportion of people engaged in that economy operated as informal traders, yet official trade statistics typically only captured formal trade, thereby contributing to a lack of recognition of ICBT’s important economic role.
“In the absence of sufficient formal opportunities, ICBT is crucial to addressing vital issues of income generation, job creation, and food and energy security, particularly for Africa’s most vulnerable people, such as women and youth, who usually constitute the majority of informal cross border traders,” she said.
According to Ms. Awani, the first step to effectively reflecting the special needs of informal traders in national, regional and continental policy frameworks is to identify the scale, magnitude and characteristics of informal cross-border trade. That was why the UNECA-Afreximbank ICBT pilot project focused on data collection.
She added that information on the scale, magnitude and characteristics of informal cross-border trade would facilitate tailored investment and policy planning to overcome the challenges of ICBT. The data collected by the study would help to point out the lending instruments and interventions that were needed to respond to the specific financing challenges faced by informal cross-border traders.
David Luke, Coordinator of UNECA’s African Trade Policy Centre, said that the project would build on the East African ICBT methodology which currently served as the best practice on the continent. That would help to ensure harmonization and comparability across Africa.
Mr. Luke added that an android tool had been developed for cost effective and efficient data collection.
The data collection exercise is scheduled to commence in September and to last four-months in order to account for seasonal trends and fluctuations. The final outputs of the project will be launched in early 2020 and will include a comprehensive report detailing the scale, characteristics and challenges of ICBT along the corridor and a harmonized manual for ICBT data collection for the ECOWAS region to feed into the ECOWAS Regional Informal Trade Regulatory Support Programme.