Dr. Ernest Addison
ERNEST Addison, Governor of the Bank of Ghana, has called on governments in Africa, to strategically position themselves and take advantage of the opportunities presented by AfCFTA, to improve trade among themselves.
Speaking at the Ghana Trade Roadshow in Accra Friday, he said “The trade constraints in Africa are partly linked to small, fractured, and partially-isolated markets. The effective implementation of AfCFTA would therefore be a giant step forward and the agreement demonstrates Africa’s readiness to integrate into the global trade agenda.”
Calling for commitment from all countries and all stakeholders to push the foregoing agenda, he said the Africa Trade Roadshow series is coming at an opportune time to help facilitate and create the enabling environment for trade for all stakeholders in the trade industry in Ghana.
“African integration and development is anchored on financial sector development and access to finance and investment. In addition to the fragmented markets, inadequate payment systems infrastructure has been identified as a major constraint to intra-African trade.
“Payments within Africa are mostly done through correspondent banks before reaching the recipient African neighbour. This comes with high transaction fees, compliance costs, applied foreign exchange conversion rates, and liquidity costs.
“Thankfully, with the introduction of the MANSA and the PAPSS platforms, financial transactions within Africa are likely to receive a boost. Afreximbank’s MANSA platform is intended to provide secure and trustworthy means for proper verification of counterparties and due diligence, one of the main challenges facing intra-African trade today,” he said.
The BoG Governor said the PAPSS platform will give businesses in Ghana access to the entire African continent and enable them to engage in financial transactions in local currencies.
“With trade taking place in the respective local currencies of these countries, demand for the dollar will significantly reduce, impacting interest and exchange rates and strengthening our respective currencies in the process. The role of financial institutions in the implementation of PAPSS, both as facilitators and integrators, for easy and hassle-free payments across borders, is undoubtedly crucial.
“Ghana has a significant role to play in the integration of the financial system of ECOWAS. This process includes: (a) capital market integration; (b) regional currency convertibility/quoting and trading national currencies; (c) harmonisation of the legal and regulatory frameworks of the banking sector; (d) harmonisation of legislations; and (e) cross-border payments system integration,” he underlined.
According to him, the implementation of these reforms would ensure the development of a robust financial sector in Ghana to participate in funding trade transactions presented through the AfCFTA platform.
“Ghana’s financial sector can play a pivotal role in leveraging AfCFTA to boost the country’s socio-economic development. This can be achieved through investments in infrastructure and financial technology to support regional trade transactions. These favourable conditions and Ghana’s position as the gateway to West Africa, among other factors, earned Ghana the rights to host the AfCFTA Secretariat.”