(Ecofin Agency) - In a significant development for the operationalization of the African Continental Free Trade Area (AfCFTA), 24 new countries are set to join the Guided Trade Initiative in 2024. Wamkele Mene, the Secretary-General of AfCFTA, announced this expansion during a roundtable discussion on January 16, 2024, at the 54th World Economic Forum in Davos.

The Guided Trade Initiative, launched in October 2022, aims to test the operational, institutional, and legal environment of the AfCFTA agreement. Already joined by seven countries (Ghana, Cameroon, Rwanda, Kenya, Mauritius, Egypt, and Tanzania), the initiative facilitates the free exchange of 96 products with tariff preferences.

Mene revealed that out of the 47 countries that ratified the African Continental Free Trade Area, 31 will join the Guided Trade Initiative in 2024, marking a substantial increase from the seven countries that participated in 2023. The initiative covers a range of products, including pharmaceuticals, rubber, pasta, tea, coffee, steel, and wood. Notably, participants benefit from tariff preferences, and rules of origin are applied to the traded products.

One of the key components of the initiative is the use of the Pan-African Payment and Settlement System (PAPSS), a revolutionary financial market infrastructure facilitating instant cross-border payments in local currencies across African markets. Mene emphasized that this multilateral settlement system is expected to save the continent over $5 billion annually in payment transaction costs, streamlining cross-border transactions and reducing reliance on strong currencies.

The expansion of the Guided Trade Initiative aligns with the broader goals of the AfCFTA, which anticipates a 53% increase in intra-African trade, transforming the continent into an attractive market with a potential consumer base of 1.3 billion, according to estimates by the International Monetary Fund (IMF).