With an estimated volume of trade between countries in Africa currently valued at about $1 trillion every year, Executive Vice President, African Export-Import Bank (AFREXIMBANK), Amr Kamel, says there were prospects for growth if identified barriers were removed.
Mr. Kamel who is in charge of Business Development and Corporate Banking was speaking on Friday at the opening of the AFREXIMBANK Annual Customer Due Diligence and Corporate Governance (ACDICOG) Forum in Casablanca, Morocco.
He identified key constraints to intra-African trade to include dearth of strong corporate governance and due diligence practices among operators. Besides, he said the problem could be attributed to over-estimation of African risks, which tend to be much bigger than the actual.
To ignite intra-African trade and drive economic growth, Mr. Kamel emphasized the need for structures to re-establish correspondent banking facilities to boost the continent’s risk profile. Concerns about limited capacity to finance and sustain trade, he noted, has resulted in the exodus of large global banks and financial institutions with the capacity to finance trade in Africa.
To redress Africa’s trade finance needs, Mr. Kamel told participants in the forum AFREXIMBANK has undertaken a number of initiatives that would enable it fill the existing gap.
“We (AFREXIMBANK) have a number of programmes and initiatives to bring together African financial institutions, corporate entities and regulators on customer due diligence and corporate governance to learn from best practices, reposition the continent and improve its risk profile,” he said.
The initiatives include the African correspondent banking initiative, to expand African banks’ access to correspondent banking facilities tailored to suit their needs.
The example of the initiative is the recently launched MANSA repository platform, a centralized database for conducting customers due diligence checks on counterparties in Africa he said.
The initiative, he added enables participants from across the continent to deliberate on the effectiveness of current measures and to assess whether these are adequately promoting good governance and due diligence practices. It provides a platform for sharing ideas and for the implementation of best practices in addition to paving the way for a collaborative approach to de-risking issues affecting Africa.
The theme for this year’s forum was “Developing Capabilities to Minimise Negative Perception about Correspondent Banking in Africa: Enhancing Compliance, Governance and Financial Inclusion”.