Payments systems key to success of AfCFTA – BoG Governor

Economics Ppp Afcfta
Economics Ppp Afcfta

The Governor of the Bank of Ghana, Dr. Ernest Addison has firmly asserted the banks conviction that payments systems will be key to the success of the African Continental Free Trade Area (AfCFTA).

Speaking on the final day of the Ghana Academy of Arts and Sciences (GAAS) 2022 Public Forum, the Governor delivered a masterclass on the subject, saying that a supportive payment and settlement system can be used as a strategic tool to enhance and facilitate the African regional integration drive, increase competitiveness, and improve Africa’s position in the international financial system.

“A strong and well-regulated African financial infrastructure could deepen the benefits of intra-regional trade, eliminate use of third currency for settlement, improve liquidity management of firms, and reduce transaction costs,” he stated.

The forum, an annual event by the GAAS, is part of efforts to bridge the gap between Academia, practice and the general public.  This year’s sessions, held from June 6 – 8, was sponsored by UMB, a leading indigenous Ghanaian bank, as part of its 50th anniversary celebrations.

Experts and leading lights who spoke at the forum included Prof. Ernest Kofi Abotsi, Prof. Kwadwo Appiagyei-Atua, David Ofosu-Dorte, Beatrice Chaytor, Head of Trade in Services Division at AfCFTA, and John Apea, the recently appointed CEO of eTranzact. 

The Governors presentation was preceded by a lecture by Professor Ebo Turkson of the Dept. of Economics at the University of Ghana, in which he emphasized on the need for heavy investments in hard and soft infrastructure to cut down the cost of intra-African trade.

With the aid of tables and graphs, Prof. Turkson illustrated how it was cheaper for a Ghanaian business to trade with Europe than with an African country, arguing that without infrastructure African Trade would not work.

In response to a question, the Chief Executive Officer of UMB, Nana Dwemoh Benneh said argued that syndication was critical for Ghanaian banks to partake in the financing deals critical to build the soft and hard infrastructure needed to facilitate intra-African trade.

He further stated that Ghana had an advantage, as structures like the Development Bank and the EXIM Bank allowed the banking sector to provide the needed muscle for such syndications.

Speaking to this reporter, Prof. Opoku-Nti, Vice President of the GAAS thanked UMB for sponsoring the forum, and indicated that this was the kind of collaboration that was critical for innovation in Ghana.

The Forum was also well patronized by leading dignitaries and luminaries such as Herbert Krampah, Deputy Minister of Trade; Prof. Peter Quartey, Prof Fiadzoe, as well as Nana Dr. SKB Asante and Prof. Akilagpa Sawyerr – both former Presidents of GAAS, and some senior executives from the Bank of Ghana.

The proceeding of the forum can be accessed online on the website of the Academy.

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