The President of the African Export-Import Bank (Afreximbank), Dr George Elombi, has called for measures to reduce currency barriers and strengthen payment systems to facilitate trade among African countries.
Elombi said differences in national currencies remained a major obstacle to cross-border transactions, making it difficult for businesses and traders to exchange goods and receive payments across the continent.
Speaking in an exclusive interview with ARISE News on Monday, Elombi cited the trading relationship between Nigeria and Benin Republic as an example of the challenges facing intra-African trade.
He explained that traders operating across the borders often face difficulties converting payments received in one country into the currency required to conduct business in another.
He said, “You have numerous currencies, but you have to pay. Benin and Nigeria are so close, two different currencies. The trading lady in Benin needs to sell to Nigeria.
“And all you do get if you sell to Nigeria is Naira, but she needs CFAs in Benin.”
Elombi said Afreximbank had supported the development of a continental payment system to address these challenges and make cross-border transactions easier for African businesses.
He disclosed that the idea of establishing such a system dates back to 1963, when African heads of state first considered the need for a payment arrangement that would facilitate trade across the continent.
He said, “The payment system was actually not a French bank’s idea. Do you know whose idea it was? Shareholders.
“But do you know when? 1963…”
“A very long time coming. And it was decided by African heads of states. Just think about it, the foresight then.
“In the very first resolutions that were made in the then Organization of African Unity. First meeting, first set of resolutions, we must have a payment system. And it took so long for us to get to it, but yet we are there.”
The Afreximbank president said the Pan-African Payment and Settlement System (PAPSS) was now operational but required greater participation and expansion to achieve its objectives.
He added that reducing currency barriers would eventually make trade across African countries easier.
Elombi said, “So that’s the mission of African Bank. I think it is extremely important that we get that payment system in place. It is now functional, but it has to grow in its scope.
“It has to grow in volumes. And that’s the business we are on. And once that is developed, then ultimately, hopefully with time, we would then narrow the currencies.
“So that trade is made easier.”
He also highlighted the importance of the Intra-African Trade Fair in connecting businesses and creating opportunities for companies across the continent to expand their markets.
According to him, the initiative, like the continental payment system, was rooted in the vision of African leaders who recognised the importance of strengthening economic cooperation.
He said, “And like the payment system, the trade fair was also a decision of the first meeting of African heads of state in 1963. See how far back they went. And see how much later we are executing.
“So we thought we should give substance to the ambitions of African heads of state.”
Faridah Abdulkadiri
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