E-Financial
Afreximbank Mulls Currency Trading Platform to Bridge $50bn Intra-Africa Trade Gap
The African Export-Import Bank (Afreximbank) has announced plans to launch its currency trading platform in a bid to bridge the Intra-African trade financing gap estimated at over $50 billion annually.
The President and Chairman of Board of Directors, Afreximbank, Prof. Benedict Oramah disclosed this at the 8th Goddy Jidenma Foundation (GJF) biennial public lecture tagged, “The trade route to poverty reduction in Africa in a de-globalising world.”
He said plans are ongoing to launch the platform in May, 2024, stating the urgent need to aggressively fill the intra-African trade gap.
Afreximbank, he said, operates an intra-African Trade Division that has disbursed over $40 billion since 2016, with an amount of about $11 billion outstanding, equivalent to about 28 per cent of Afreximbank’s loan portfolio.
According to him, “The Currency Trading Platform will also be launched under the auspices of Pan-African payment and settlement system (PAPSS).
“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.”
The Afreximbank boss said access to trade and investment information is key, “as lack of access is perhaps the greatest impediment to intra-regional trade.”
To address this challenge, He said Afreximbank offers an Artificial Intelligence-enabled Trade Information Platform under the brand name Tradar Intelligence.
“It is for the same reason that Afreximbank collaborates with the African Union Commission (AUC), the AfCFTA Secretariat, and others to host a biennial intra-African trade Fair. The three editions so far held since 2018 attracted an aggregate of over 70,000 visitors, 4,000 exhibitors and about 120 billion US dollars in deals,” he said.
On the status of implementation, he said the African Continental Free Trade Agreement (AfCFTA) Secretariat is operational in Accra, Ghana where 54 countries have signed the Agreement, and 47 have ratified it.
“While much progress has been made, a lot is still required to ensure that trading under the Agreement is boosted. For example, to avoid its falling victim to the discontent that negatively impacted globalisation, the AfCFTA must be complimented by the Free movement of Africans across the continent, with the right to work.
Although 32 countries have signed the Treaty, only four countries ratified it, falling short of the required 15 ratifications for the Free Movement Protocol to enter into force. We must continue to make aggressive push for countries to ratify the Treaty so as to get the requisite ratifications for it to come into force,” he urged.
Also speaking, the Founder and Executive Secretary, GJF, Dr. Ije Jidenma, said there is a perfect congruence between Prof. Oramah’s Pan African vision and the GJF quest to be part of the national think tank and solution to the nation’s developmental challenges.
“Even though the developmental turf is tough, as a seasoned public intellectual and one with a great sense of history, Prof Oramah is one person that is not ready to give up hope about Africa’s renaissance,” she said.
On his part, the Chairman, Board of Trustees GJF, Pat Utomi, said the world has gone through rounds of globalisation, recession and war, advising that the challenge is for Nigeria to think outside the box on ways it cpuld prosper in this new swing in Africa.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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