The African Continental Free Trade Area Secretariat and Quest Ghana Ltd. agreed to develop a digital corridor connecting markets and payment systems across the continent, part of an effort to make it easier for businesses to trade across African borders.
The project, valued at $5.17 billion by Quest Ghana, will include a digital marketplace, an African minerals and commodities exchange and an interoperable cross-border payment system, the AfCFTA Secretariat said in a statement Monday.
It will also provide logistics, trading, tracking and settlement services for minerals and commodities.
Seychelles will provide sovereign support for the joint venture and host its headquarters in Victoria, according to the statement. The parties didn’t disclose details of that support or how the $5.17 billion project would be financed.
“Trade is the engine of Africa’s prosperity, and digital infrastructure is the track on which that engine must run,” AfCFTA Secretary-General Wamkele Mene said. The infrastructure will help businesses, particularly micro, small and medium enterprises, youth and women traders, conduct business across the continent, he added.
The agreement follows a memorandum of understanding signed in March and cabinet approval by the Seychelles government in July.
African governments are seeking to increase commerce within the continent through the AfCFTA, which is designed to create a single market spanning 55 African Union member states and about 1.4 billion people. The economies covered by the agreement have combined gross domestic product of about $3.4 trillion, according to the Secretariat.
The parties behind the corridor have a shared ambition to increase annual intra-African trade to $500 billion and beyond from about $200 billion, according to the statement.
Africa has struggled to expand trade within the continent amid infrastructure gaps, fragmented payment systems and other barriers that increase the cost and complexity of moving goods and money across borders. The AfCFTA agreement entered into force in 2019 as part of efforts to remove those obstacles and deepen economic integration.
“Africa’s future depends on the flow of goods, services, and capital across its borders,” Quest Ghana Executive Chairman Philip Gamey said. The corridor would create a platform for “transparent, efficient, and inclusive trade” connecting more than 1.4 billion people, he added.
Seychelles Finance, Economic Planning, Trade and Investment Minister Pierre Laporte said the country was “proud to lend its sovereign support” to the project and host its headquarters. Seychelles secured cabinet approval because of the corridor’s potential to transform how African countries trade, he said.
