Today, African Export-Import Bank signed a Memorandum of Understanding (MoU) with the World Trade Organization (WTO) to amplify the impact of their strategically aligned joint efforts of promoting global trade leveraging Africa’s unique resource endowment.
The MoU will allow the two organizations to pursue a collaborative framework for harmonizing and coordinating their efforts towards deepening key trade development activities on the continent. Afreximbank and the WTO are part of an inter-agency partnership that is championing transformative change in the cotton industry in Africa’s Cotton-4 plus (C4+) countries, which include Benin, Burkina Faso, Chad and Mali as well as Côte d’Ivoire as an observer.
The MOU will afford the Bank and the WTO Secretariat the opportunity to expand and deepen their collaboration to support the cotton sector beyond the C4+ countries. Their support will entail development of local and regional value chains of cotton in Africa as well as their integration into the global value chain.
Another area of collaboration under the understanding will be on Trade Finance matters, addressing non-tariff barriers to trade, the digital economy, capacity building, the oceans’ economic and fisheries subsidies, the sports and creative economies and trading in the context of the African Continental Free Trade Agreement.
While speaking at the MoU signing ceremony, Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said: “The WTO Secretariat is a natural partner to Afreximbank given our shared mandate of promoting trade and trade-related activities. We are already working with the Secretariat on FIFA’s C4+ Cotton Initiative, for which we have committed financing for project preparation for cotton transformation projects in Africa. Formalizing our relationship today signifies that we can go beyond our present collaboration to include other equally impactful interventions across key economic sectors in Africa.”
“The Bank recently signed a Charter with Confédération Africaine de Football (CAF) and the Rebranding Africa Forum (RAF) to build a robust sports’ economy, which will include commercializing and monetizing African made sports apparel and athleisure wear. This is yet another undertaking that will benefit from this MOU with the WTO Secretariat.” He added.
Dr. Ngozi Okonjo-Iweala, Director General of the WTO Secretariat said: “The signing of this MOU is timely as it reflects some of the key priorities of many of our Members. I am particularly pleased to see that it will support Members’ efforts in Agriculture and Food Security, advance efforts to address harmful fisheries subsidies, and promote cooperation on Trade Finance. I am especially pleased that Afreximbank has committed to explore the opening of a finance window that would assist the C-4 plus countries on their journey to scale value addition on the continent. I look forward to seeing real, on-the-ground results from this partnership.¨
The C4+ countries have historically exported raw cotton for processing outside of the continent. Developing local industries to process and transform cotton into textile, could potentially create 500,000 jobs in the West African region. If harnessed well, it is expected that within the next 10 years, the C4+ countries could process up to 25% of their cotton crops. This undertaking requires circa US$ 5 billion in investment in production facilities and training for workers. Which in turn calls for capacity building, access to finance for businesses, and improved infrastructure.