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Africa and Ghanaians were pleased with the announcement of the operationalization of the African Continental Free Trade Area (AFCFTA) agreement on July 7, 2019. AfCFTA, as it is affectionately known, is an area of free trade described in the 55 nations of the African Union.
The free trade area is the largest in the world in terms of participating countries since the creation of the World Trade Organization. For a bit of history, the agreement was negotiated by the African Union (AU) and was originally signed by 44 of the 55 member states in Kigali, Rwanda, on March 21, 2018. L & H The agreement originally provided for the removal of tariffs for 90% of goods by members, allowing free access to products, goods and services across the continent. Since July 7, the South African Free Trade Agreement (AfCFTA) is the largest trade agreement signed since the establishment of the World Trade Organization (WTO).
For the first time, Ghana was chosen to host the AU's independent organization, while Malcolm X and Haile Selbadie, its first president (Dr Kwame Nkrumah), were the founders of the then OAU . Infrastructure of the AU. The location of the AfCFTA Secretariat in Ghana is long overdue and politically expedient.
One of the African Union-affiliated financial institutions, the African Import Import Bank (Afreximbank) based in Cairo on 7 July 2019 in Niamey, Niger, officially launched the Pan-African Payment and Payment System. settlement-delivery (PAPSS). Benedict Oramah, President of Afreximbank, "The PAPSS is a platform that will domesticate intra-regional payments, save more than $ 5 billion in annual transaction payment costs for the continent, formalize a significant share of intra-regional informal trade estimated at USD 50 billion, and especially to stimulate intra-African trade". This is an effort to create the first continent-wide digital payment system that should facilitate the payment of goods and services in local currencies.
As an ICT practitioner, I am very enthusiastic and consider the PAPSS to be good news. The lack of digital payment systems has been one of the setbacks of free trade agreements in the current regional trading blocs. There are already free trade agreements for members of the Economic and Monetary Community of Central Africa, the Southern African Development Community, the Customs Union of the United States of America and the United States of America. Southern Africa, the East African Community and the West African Economic and Monetary Union.
ECOWAS, for example, already has free trade agreements between its member states, but due to a multitude of problems, including the lack of digital payment systems, member states do not yet see the interest of signing such agreements. A typical example is the transfer of money from Ghana to a person in Benin through the normal banking system. First, it would take more than 48 hours for your transaction to be reflected in the recipient's account. Second, the chances of your transaction going through an intermediary bank in Europe or the United Kingdom are high. Once the transaction is completed, the transaction costs are on the sender and the receiver.
In Europe, the European Union (EU), as part of its integration process aimed at making the whole of Europe a unit, has set up the European Union. Single Euro Payments Area (SEPA) to simplify bank transfers dominated by euro. SEPA, like the PAPSS, aims to improve the efficiency of cross-border payments and to transform fragmented national euro payments markets into a single national market. SEPA allows customers to make cashless payments in euros on any account located anywhere in the European zone. The best part of this payment system is that SEPA guarantees that payments in euros are received within a guaranteed time, and that banks are not allowed to deduct the amount transferred. SEPA allows customers to make cashless payments in euros on any account located in the area, with the help of a single bank account and a single set of instruments of payment. People who have a bank account in a euro area country can use it to receive salaries and make payments throughout the euro area.
In a spirit of inclusion and in the search for a unified AU, the implementation of AfCFTA is only the first step. We look forward to the day when we will have free mobile voice and data roaming (with local data charges for voice and data) on the African continent. Free movement of people in Africa by setting up visa-free travel for all holders of African pbadports in all African countries. Starting with Ghana, we should start considering eliminating the costs of using ATMs and Point of Sale (POS) devices if we really want to move to a digitized Africa without money. The current fees that are imposed on an ATM card when you use a bank machine or point-of-sale device are a huge disaster for our campaign for a cashless and digitized company.
I therefore call on those responsible for the implementation of the PAPSS to ensure that all the banks of the continent are integrated into the PAPSS platform. Afreximbank as an institution will play a crucial role in AfCFTA's ambition to create a single and largest market for goods and services. It is also expected that other private entities will commit to providing competing digital payment platforms for the entire African region. Competition is a good thing and helps to bring out creativity and innovation.
Author: The author is a member of the Institute of ICT Professionals Ghana; Telecommunications Consultant
Warning: "The views / contents expressed in this article only imply that the responsibility of the authors) and do not necessarily reflect those of modern Ghana. Modern Ghana can not be held responsible for inaccurate or incorrect statements contained in this article. "
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