The Africa Export-Import bank, Afreximbank has said its collaborative charging guarantee scheme will enable the issuance of a single transit guarantee for the movement of goods in Africa.
This is hinged on current efforts being made by relevant authorities on the continent to promote intra-Africa trade and ensure easy payment for goods and services.
The Regional Operating Officer Anglophone at Afreximbank, West Africa, Eric Intong a representative of the Bank’s President Benedict Oramah said through the scheme, the 16 landlocked African countries would be able to move goods from Lagos, Nigeria to Accra, Ghana, or Cape Town, South Africa to Cairo, Egypt.
Intong made this statement while speaking on the topic; “key financing by the Afreximbank in support of Intra-Africa Trade and Investment” during the African Day segment at the ongoing 36th Edition of the Lagos International Trade Fair.
He said, “the negotiations for the implementation of the Africa Free Continental Trade Agreement, AfCFTA would promote intra-Africa trade, which today stands at about 80% According to the AfC FTA Secretariat, when compared to over 60% for the European trade and over 70% for the integration trade.”
Intong further said that the trade facilitation initiatives being pursued by afreximbank Under the leadership of Professor Benedict, Oramah, dabbed the Africa trade gateway included; the Monzo KYC platform which is an African wide know your customer and customer due diligence platform which allows African entities, corporates, financial institutions, SMEs, state-owned entities and parastatals to provide their KYC CDD information on a single platform based on best international standards to change the negative perception on African entities.
The Afreximbank said this will reduce KYC CDC CDD AML costs and of course, attract investment in the continent. Each entity is assigned a unique master ID which will enable that entity to make payments on the Pan Africa Payment and Settlement System, paps which enables intermittent trade payments to be made in 42 African currencies.
For example, an importer in Nigeria will pay in Naira for goods from Kenya and the exporter in Kenya will receive Kenyan shillings while afreximbank and the central banks of Kenya and Nigeria will provide clearing and settlement. It is estimated that the successful implementation of paps will save Africa $5 billion annually as payment for each country. It will be done in local currency.
Paps was piloted in the West Africa monetary zone, which comprises Nigeria, Ghana, Sierra Leone, Liberia, the Gambia, and Guinea, and today paps has eight central banks and about 50 commercial banks connected to each go live are expected in Q1 2023.
The Trade Information Portal will provide all trade information for countries on a single platform and the trade regulation information portal will make available all the regulations for all African countries which have been developed for implementation in 2023.
Dominica Nwabufo
