…as Afreximbank launches Africa Trade Gateway
The Bank of Ghana (BoG) Governor, Dr. Ernest Addison, has underscored the need to leverage digital platforms and ecosystems for efficient trade, investment and commerce in Africa.
Speaking at a stakeholder side-event at the 30th Afreximbank Annual Meeting, themed ‘Unlocking Africa’s trade, investment and commerce opportunities leveraging digital platforms and ecosystems’, Dr. Addison stated that it is crucial to critically examine pathways to harness and innovate diverse approaches to the people of Africa’s betterment.
Dr. Addison stressed that the transformative power of technology has revolutionised industries worldwide, and Africa must seize the opportunity to foster regional integration and boost economic growth.
He identified three main channels through which this can be done: enhancing digital infrastructure; fostering digital entrepreneurship and innovation; and promoting digital skills development.
“Access to reliable and affordable Internet connectivity is the foundation upon which digital platforms thrive. Governments and private sector stakeholders must collaborate to invest in broadband infrastructure, expand network coverage, and bridge the digital divide within and across countries,” Dr. Addison said.
His comments come as Afreximbank and the African Continental Free Trade Area (AfCFTA) at the same event launched the Africa Trade Gateway (ATG) – a suite of digital platforms to support African trade and implement the AfCFTA.
The ATG includes five platforms: MANSA for due diligence; Pan African Payment and Settlement System (PAPSS) for payment and settlement; TRADAR Club for trade intelligence and advisory services; ATEX for business to business (B2B) and business to government (B2G) e-commerce; and ATG Connect for freight and logistics connectivity.
The goal is to provide a single window for customers to complete transactions and overcome African trade and investment barriers. The ATG is supported by Afreximbank, the AfCFTA and their partners to promote trade, commerce and investment in Africa.
The Gateway is anticipated to drive a surge in exports across the continent. In 2021 exports increased by 40 percent, recovering from a 19 percent contraction the previous year, data from Afreximbank indicate. This growth reduced the trade deficit by 56.02 percent, bringing it down to US$35.27billion in 2021 from US$80.19billion in 2020. Economic activities, investments and global demand resurgence after the pandemic containment phase positively impacted commodity terms-of-trade, leading to a 10.5% recovery in foreign reserves – reaching US$426.7billion in 2021, the development institution showed.
Africa’s merchandise trade value with the rest of the world increased by 31.4 percent in 2021, amounting to US$1.18trillion following a 16.2 percent decline in 2020. Intra-African trade also rose by 18.2 percent in 2021, reversing a 7.3 percent decline in 2020. The recovery in African trade was driven by the global economic rebound and improving commodity terms of trade, Afreximbank said.
Dr. Addison also highlighted the importance of fostering digital entrepreneurship and innovation, stating that Africa is a hotbed of entrepreneurial talent with a technologically-savvy youthful population.
The central bank head noted that establishing incubation centres, digital mentorship programmes, and access to funding would empower small- and medium-sized enterprises (SMEs) to develop innovative solutions which address the continent’s unique challenges and needs.
He emphasised that African central banks and providers have been at the forefront of supporting digitalisation and providing the necessary regulatory environment for fintech and financial institutions to thrive in unlocking Africa’s trade, investment and commerce opportunities.
Dr. Addison cited Ghana’s active participation in the MANSA Platform as a significant initiative the country has undertaken, highlighting its role as a central bank verifier for financial institutions – including microfinance institutions – in Ghana.
He pointed out that by serving as a verifier, the platform ensures ‘know your customer/customer due diligence (KYC/CDD)’ information of these entities is accurate and reliable; thus enhancing transparency, reducing risks and promoting trust among stakeholders.
“The success of these digital platforms and ecosystems, however, depends on the active participation and collaboration of all financial institutions and private businesses. We strongly encourage all stakeholders to embrace these initiatives and make them work for their respective businesses. By joining these platforms and leveraging digital technologies, financial institutions can expand their reach, enhance efficiency and unlock new market opportunities,” Dr. Addison explained.
The Governor further stated that the BoG is committed to supporting digitalisation and providing an enabling regulatory environment for fintechs and financial institutions to unlock Africa’s trade, investment and commerce opportunities by leveraging digital platforms and ecosystems.