Afreximbank and Africa Continental Free Trade Area (AFCTA) is set to further simplify cross-border trade within Africa with the launch of its African Currency Trading Platform in May 2024, Benedict Oramah, AfreximBank president, said.
“In partnership with the African Union Commission, the AfCFTA secretariat launched PAPSS, a system that would handle all intra-trade payments. Afreximbank supports with a settlement fund of $3 billion and by May 2023 an African Currency Trading Platform will also be launched under the auspices of PAPPS,” he said.
PAPSS, which was launched to make cross-border transactions seamless, has brought over 25 commercial banks onto its system since its launch by the African Union and Afreximbank in 2022.
This was discussed at the 8th Goddy Jidenma Foundation biennial public lecture themed “ The Trade Route To Poverty Reduction in Africa in a De-Globalizing World” on Thursday in Lagos.
He said that this is a solution to the 55 fragmented payment systems across Africa which will unblock funds locked in various African countries due to a lack of foreign exchange. The system will allow Africans to receive payment in their nation’s currency.
“It is now becoming possible for a small farmer in Malawi to use his cell phone to purchase a Nollywood streaming movie and pay in the Malawian Kwacha while the seller in Nigeria receives Naira. We are nearing the stage when an Egyptian can buy shares on the Nigerian Stock Exchange paying in Egyptian Pounds,” he said.
The AfreximBank president mentioned that trade remains the most potent force in catalysing economic transformation and the Afreximbank through its array of AfCFTA-enabling programs presents clear solutions to the challenges of implementing free trade agreements.
He also mentioned that some of these challenges that affect cross-border trading within Africa include; the existence of multiple standards for tradable goods and the limited capacity for conformity assessment, transit constraints across the 55 fragmented countries and 110 borders, and poor access to trade and investment information.
The idea of countries working closely together in trade globalization got hit hard by the COVID-19 pandemic and the war in Ukraine.
These events made some countries more focused on themselves nationalistic and messed up the flow of goods around the world supply chain.
The disruption of international supply chains arising thereof has dashed Africa’s hope of trading itself out of poverty under the global system and created the need to look within the region.
Pat Utomi, the chairman board of directors of the Goody Jidenma Foundation said the world had been experiencing globalisation throughout history, but Africa must learn to prosper in this new wig of deglobalisation.
“The world has gone through rounds of globalisation, and prosperity has come from it. However, nations are beginning to protect their gains. How do we prosper in this new wing as Africans?” he said.
Ije Jidenna, Convener of Goody Jidenna Biennial Public Lecture, said that Africa has made tremendous progress over the years despite challenges.
“Africans have had it tough in history, but we’re making progress albeit slowly. AfreximBank is doing a lot, but if we have a higher view, we’ll know it’s in our self-interests to work together. That reorientation is necessary,” Jidenna said.
