NASSAU, Bahamas — Caribbean Community (CARICOM) finance minister and central bank governors will meet next week ahead of the annual heads of government meeting in Grenada in July to discuss using Afreximbank’s Pan-African Payment and Settlement System (PAPSS) to make trade payments in the region.
Guyana President and CARICOM chairman, Dr. Irfaan Ali addressing the 31st Afreximbank Annual Meeting and the Third AfriCaribbean Trade and Investment Forum (ACTIF2024) in the BahamasCARICOM Chairman and Guyana’s President Dr. Irfaan Ali, told the 31st Afreximbank Annual Meeting and the Third AfriCaribbean Trade and Investment Forum (ACTIF2024) that ends here later on Friday that every CARICOM country has complained about the payment settlement system.
“We have an opportunity now that you are vested with a payment settlement system and that is why as Chair of CARICOM, I have asked the Chair of the CSME (CARICOM Single Market and Economy) Prime Minister [Mia] Motley and she has agreed to convene a meeting with ministers of finance and governors next week so that we can take to the next heads of government meeting in CARICOM a proposal where we can use your system to implement a regional system for payment settlement,” Ali said.
“We don’t need to reinvent the wheel,” he said during the opening ceremony of the three-day meetings.
“We need to trust each other. We need to trust our system. We need to trust our brain power. That is what is important,” Ali told the meetings, which were attended by a number of CARICOM leaders, including Motley,host prime minister Phillip Davis, St. Lucia’s Phillip J. Pierre and Dickon Mitchell of Grenada.
“We do not trust ourselves and the potential we have in finding the solutions that are required for ourselves. And that is what this forum offers us: the understanding of each other and the building of trust. We are on to a good platform in the building of trust between Africa and the Caribbean. Let us take this forward to greater heights,” he said.
At the bank’s 3th annual meetings in Ghana in June 2023, Mottley praised PAPSS, which allows countries across the continent to trade with each other using their local currencies.
Eleven CARICOM countries have joined Afreximbank and ahead of the 2023 meetings, the Association of CARICOM Central Banks adopted PAPSS as their preferred payment infrastructure for a pilot project.
Mottley had spoken of CARICOM’s experience, decades ago, when devising a multilateral clearing facility, which was intended to facilitate inter regional trade.
“But unlike PAPSS, there was no guarantor and therefore when a country got into difficulties with respect to liquidity, it meant that that money remained owing,” The Barbados Prime Minister had explained at the meetings in Ghana.
“The difference this time around is the courage and the commitment of the Africa ExIm Bank to be able to say, as we have done here in Africa, we are prepared to guarantee this mechanism to ensure, as you heard President (William) Ruto (of Kenya) say today, ‘why should my traders in Kenya and Djibouti have to trade in a currency that has nothing at all to do with what we are trading? Perhaps not even the location of the goods which we are trading,” Motley had said.
In his address Ali noted the changes in the three years since Afreximbank began expanding to the CARICOM region.
“Three years ago, we would not have seen a single sophisticated investor from Africa in this region. Fast forward to today, we have seen in this region, since AfriExim Bank came on board, more than 50 African delegations looking at business opportunities in this region. That alone tells you a story.”
He was speaking at the annual meetings that were taking place in the Caribbean for the first time and whose participants included Africa’s richest person, Nigerian businessman, Aliko Dangote, founder, chairman and chief executive officer of the Dangote Group
“We have seen the billionaires, the technology companies, we have seen an interest, we have seen a spark, and it is this little spark that can ignite a massive transformation and realisation of the opportunity and potential that exists within our region.”
Ali said that many people say that CARICOM is small and question the opportunities available in the region.
“But I want to remind you that when we look at the region, we must not only look at the region in its population size and in relation to the market size. It is what the region can give us access to. And this region collectively can give your businesses access to more than a billion people,” he said, noting the region’s trade relationship and trade agreements.
He said CARICOM sometimes take this important fact for granted, adding that in the United States, the US the aquaculture market is four billion US dollars and countries in the regional bloc are in the top two per cent in terms of natural competitiveness for aquaculture.
The CARICOM region also has an advantage as regards renewable energy with an average of 2,755 hours of sunshine per year.
“This offers an interesting opportunity in solar energy,” Ali said.
Further, CARICOM has an annual average wind speed of more than eight meters per second in some territories, compared with continental Europe wind parks where the annual average wind speed is 5.5 meters per second.
“Those are advantages that we possess in this region. Imagine, if Africa can come together, mobilise the capital and manufacture, we have the lowest environmental impact in the world. Imagine if we manufacture all the EV vehicles in the region with the lowest environmental impact. What marketing impact that would have,” Ali said.
“You have the technology, you have the capital. Through Afreximbank, we can design this and we can make the world understand that there must be a value in manufacturing EVs in the lowest environmentally impact region in the world. Imagine.”
The CARICOM chairman said Africa has over 650 million hectares or 21.4 per cent of forest.
“If you convert half of that with primary forests and the forests that we have in this region between Suriname and Guyana, we have the lowest deforestation rate in the world and collectively we say we’re going to combine this forest into a carbon market, deploy it on the international stage and say to the world you have to take stock of what we have,” Ali said.
“But more importantly, imagine if we say … we’re going to settle first among ourselves how we distribute carbon credits and how we trade the credit in the forests. We are going to create new areas of wealth. If you look at the biodiversity that exists, the marine economy in this region we have to shape the conversation and that is the power we have.”
On Wednesday, Governor of the Central Bank of The Bahamas, John Rolle, urged the Caribbean to take advantage of the presence of Afreximbank in the region, noting the opportunities for Africa and the Caribbean.
“This gathering represents a great opportunity to leverage the shared history, identities and cultures of African Caribbean nations and to forge stronger trade and investment bonds,” Rolle said as he discussed “Economic Transformation for Global Africa in a Polycrisis World”.
