Businesses across the continent will soon enjoy a convenient and affordable mode of payment, as the African Continental Free Trade Area (AfCFTA) Secretariat readies to introduce a pan-African payment and settlement platform.
When introduced, businesses will no longer have to worry about the high cost involved in making cross-country payments for goods and services, Secretary General of the AfCFTA Wamkele Keabetsewe Mene announced in Accra, in what could be a major boost for intra-African trade under the free economic zone.
“Among the challenges we hope to address are the cost of doing business and cost of transactions when you do business. The cost of payment when you want to transfer money is not cost-effective or efficient. So, we are working with African Export-Import Bank to develop a pan-African payment and settlement platform,” he said.
He spoke at the 44th annual general meeting of the Ghana National Chamber of Commerce and Industry (GNCCI), and said the platform will enable businesses to make payments across the continent in local currencies and at affordable rates.
“Currently, to make payment for goods and services from Ghana to another African country, a business first has to covert the funds from cedi into dollars before it is transferred; and then the recipients will also have to covert the dollars into their local currencies,” he said, lamenting this costly and inefficient mode.
He also said holistic efforts are being made to tackle challenges which impede trade among economies within the continent, including streamlining Customs operations in member-states.
“All the things that make doing business in Africa very expensive, we want to streamline all of them – including Customs authorities – and switch them onto a digital platform for the range of activities that they do as Customs.
“We can use digital platforms to make sure that trade in Africa is affordable and easily accessible to the millions of Africans who want to conduct business across the continent. So, digital platforms in my view are going to be the catalysts for intra-African trade to take place and for us to significantly boost trade from where it stands today,” he said.
The success of the AfCFTA, to a large extent he noted, will depend on the ease with which the private sector can conduct business. “If we don’t address the constraints, if we don’t make it easier for the private sector to conduct business on the continent, this agreement will fall short.”
The AfCFTA will come into effect January 1, 2021 after the initial date of July 1, 2020 was postponed because of the effects from COVID-19.