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Business News of Sunday, 3 July 2022

Source: www.ghanaweb.com

PAPSS to reduce US dollar demand in Ghana, other African countries - BoG

Bank of Ghana Governor, Dr. Ernest Addison Bank of Ghana Governor, Dr. Ernest Addison

The governor of the central bank, Dr. Ernest Addison has said the implementation of the Pan African Payments Systems (PAPSS) among the African Continental Free Trade Area (AfCFTA) will help reduce the continent’s demand for the dollar to trade.

He believes that through the payment systems under trade pact, US dollar is expected to significantly reduce, improve interest and exchange rates and therefore strengthen African currencies in the process.

Speaking on the third and final day of the Ghana Trade Roadshow in Accra on Friday, July 1, 2022, Dr. Addison said the central bank has embarked on reforms that will enhance financial transactions with Ghana and its neihghbouring countries to boost trade.

He added that the Bank of Ghana has put a robust framework in place to help local banks take trade imports in a stress-free manner.

“The Bank of Ghana has put in place robust regulatory and supervisory frameworks to support in-country and cross-border trade transactions. There are also policies and safeguards to reduce Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) activities and create a robust and a sound financial system to support regional trade. Ghana’s financial sector can therefore be instrumental in meeting the funding needs of businesses in the country to trade under the AfCFTA umbrella.”

“In response to the opportunities that the AFFTCA presents, commercial banks are required to strengthen all risk management systems and scale-up capacity in trade finance to support the private sector. Additionally, banks and non-bank financial institutions are encouraged to increase investments in digitisation platforms as well as cyber-security systems to facilitate safe and secure trade transactions through AfCFTA."

The central bank, he emphasized is poised for spearheading Ghana’s interest in upscaling the level of trading among African countries.

Under the theme: “Supporting the Africa Trade Agenda- Ensuring the Last Mile”, the third day focused on the banking and finance community.

It was organized by Afrexim Bank in partnership with Oakwood Green Africa Limited and other local partners.

Meanwhile, Managing Partner of Oakwood Green Africa Limited, Gabriel Edgal on his part said Africa needs to own industrial revolution rather than looking elsewhere for that revolution to tap into.

 For him, it is better to do business with the continent to allow funds to stay within, rather than trading with America and Europe which only contribute to inflation because of the foreign currency the transactions are done.

The Pan African Payments Systems( PAPS)  which is a payment platform for the use of local currency for transactions will help to leapfrog into benefiting from world and international trade.

The President of Afrexim Bank, Prof. Benedict Oramah in his remarks said the Bank has succeeded in getting more banks onto the PAPS platform and so far 45 central banks have been rolled onto it.

Prof. Oramah who is also the Chairman of Board of Directors of the Bank further announced that the Bank has been admitted as the center for the continental transit transaction.

The bank, he indicated has disbursed close to $5 billion to Ghana since its establishment in 1994 and is in the process of financing two of Ghana’s projects which are a fertilizer processing plant and a railway line project to Burkina Faso.

Finance Minister, Ken Ofori-Atta was at the function to lend his support to the show said the narrative about Africa just benefiting two percent of the world’s trading must be given special priority which needs addressing.

The trade road show which has already been held in Gambia and Sierra Leone, will move to Cote d'Ivoire after the Ghana edition.

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