African development finance institutions must come together in partnership in order to more effectively tackle the challenges affecting the financing of intra-African trade, participants at the first ever continental conference on intra-African trade finance and payment systems have urged.
In discussions during the closing session of the two-day Intra-African Trade Finance and Payment Systems Conference held in Abidjan, the participants said that, as multilateral institutions in which African governments were key stakeholders, the institutions had the moral standing and capacity to galvanize policy actions from the governments to make it possible to implement measures to address the major issues affecting intra-African trade finance.
The institutions did not face the same constraints which commercial banks and other similar entities confronted in trying to address issues of cross-border trade, they stated, adding that, with its trade finance mandate, the African Export-Import Bank (Afreximbank) was best positioned to champion that partnership.
The participants highlighted the important role of intra-African trade as a catalyst for economic growth in Africa and said that finding solutions to the issue of trade finance was critical to achieving that growth.
Recognising the challenge posed by settlements in the financing of trade among African countries, they recommended that Afreximbank should create a clearing house through which payments for intra- African trade would be carried out.
According to them, the use of such a continent-wide clearing house would lead to significant reduction in the foreign exchange cost of such trade.
Another recommendation was for African central banks to be challenged to take a more continental outlook in making some of their policies, rather than continuing to operate in silos, as that would make them more amenable to adopting policies that do not create bottlenecks in the financing of cross-border trade.
In addition, it was recommended that Afreximbank should pioneer the creation of a network of African correspondent banks to make it easier for African traders to trade across borders.
In his closing remarks, Afreximbank president Dr. Benedict Oramah said that the conference had been convened to support the bank’s objective of promoting intra- African trade as a strategic measure to address the continent’s dependence on commodities and curb its reliance on external markets.
The conference served as a platform for industry participants to exchange information on intra- African trade finance and payment systems and to identify solutions to the financing challenges confronting intra-African trade.