Governor’s Welcome Address at the Ghana Trade Roadshow
Source: bank_of_ghana
Date: 2022-07-01

THE GHANA TRADE ROADSHOW SESSION WITH THE BANKING AND FINANCE COMMUNITY WELCOME ADDRESS BY DR. ERNEST ADDISON GOVERNOR, BANK OF GHANA 1ST JULY 2022 MARRIOTT HOTEL, ACCRA 1 Honourable Minister for Finance, Honourable Minister for Trade and Industry, President of Afreximbank, Secretary-General of the AfCFTA, Members of the diplomatic corps, Chief Executives and Directors of Ghana Export Promotion Authority and the Ghana Free Zones Authority, Directors of State and Private Institutions present, Business Leaders, Distinguished Guests, Ladies and Gentlemen: 1. Good morning and, for those from other counties, welcome to Accra. Thank you for the opportunity to join fellow Africans and interact with key stakeholders as we seek to advance the Intra-Africa trade agenda. Special thanks also to the organisers, Afreximbank, Oakwood Green Africa, the AfCFTA Secretariat, and all other institutions for choosing Ghana as the next destination for the Africa Trade roadshow, following after Gambia and Sierra Leone. I am confident that the Ghana edition will work to strengthen trade relations among our neighbouring countries and give Ghanaian businesses more access to the support that Afreximbank and the AfCFTA seek to provide. 2 2. Distinguished guests, the Africa Trade agenda – promoting free trade among African nations – has gained prominence in the policy discourse. After several a ttempts to promote intra -African trade, African governments t ook a bold initiative to launch the Africa Continental Free Trade Area (AfCFTA), which was officially launched in 2021. T he AfCFTA is one of the flagship projects of the African Union’s “Agenda 2063: The Africa We Want”, which aims to promote trade among 55 African countries, with a market size of about 1.2 billion people and projected US$450 billion income boost for the continent by 2035. 3. The main objective of AfCFTA is to create a single market for goods and services and promote the free movement of business persons and investments in Africa. The Agreement seeks to expand intra -African trade through better harmonization and coordination of trade liberalization and facilitation regimes. Trade remains an important driver for economic growth and development in Africa. Intra-African trade has increased in recent years ; nevertheless, Asia and Europe remain the main trade partners of the continent. High dependence on trade in primary goods, high product and market concentratio n of 3 exports, and weak regional production networks are among the main challenges of trade on the African continent. 4. The trade constraints in Africa are partly linked to small, fractured, and partially -isolated markets. The effective implementation of AfCFTA would therefore be a giant step forward and the Agreement demonstrates Africa’s readiness to integrate into the global trade agenda. To play a relevant role in this space, the continent must strategically position itself to take advantage of the oppor tunities AfCFTA presents. This would require c ommitment from all countries and all stakeholders. The Africa Trade roadshow series is coming at an opportune time to help facilitate and create the enabling environment for trade for all stakeholders in the tr ade industry in Ghana. 5. Distinguished Ladies and Gentlemen, African integration and development is anchored on financial sector development and access to finance and investment. In addition to the fragmented markets, inadequate payment systems infrastructure has been identified as a major constraint to intra -African trade. Payments within Africa are 4 mostly done through correspondent banks before reaching the recipient African neig hbour. This comes with high transaction fees, compliance cost s, applied foreign exchange conversion rates, and liquidity costs. 6. Thankfully, with the introduction of the MANSA and the PAPSS platforms, financial transactions within Africa are likely to receive a boost. Afreximbank’s MANSA platform is intended to provide secure and trustworthy means for proper verification of counterparties and due diligence, one of the main challenges facing intra -African trade today. The PAPSS platform will give businesses in Ghana access to the entire African continent and enable them to engage in financial transactions in local currencies. With trade taking place in the respective local currencies of these countries, demand for the dollar will significantly reduce, imp acting interest and exchange rates and strengthening our respective currencies in the process. The role of financial institutions in the implementation of PAPSS , both as facilitators and integrators, for easy and hassle-free payments across borders, is undoubtedly crucial. 5 7. Ghana has a significant role to play in the integration of the financial system of ECOWAS. This process includes: ( a) capital market integration; (b) regional currency convertibility/quoting and trading national currencies ; (c) harmonisation of the legal and regulatory frameworks of the banking sector ; (d) harmonisation of legislations; and (e) cross-border payments system integration. 8. The implementation of these reforms would ensure the development of a robust financial sector in Ghana to participate in funding trade transactions presented through the AfCFTA platform. Ghana’s financial sector can play a pivotal role in leveraging AfCFTA to boost the country’s socio -economic dev elopment. This can be achieved through investments in infrastructure and financial technology to support regional trade transactions. These favourable conditions and Ghana’s position as the gateway to West Africa, among other factors, earned Ghana the rights to host the AfCFTA Secretariat. 9. Ladies and Gentlemen, Ghana’s banking sector is currently well - capitalised, with adequate liquidity to support transactions generated through increased trade. The Bank has also put in place robust regulatory and supervisory frameworks to s upport in -country and 6 cross-border trade transactions . There are also pol icies 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. 10. 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 i ncrease investments in digitisation platforms as well as cyber -security systems t o facilitate safe and secure trade transactions through AfCFTA. These institutional developments should complement the PAPSS and MANSA platforms through wh ich Afreximbank will work with local businesses and financial institutions to help facilitate intra-Africa trade. 11. Distinguished Guests, Ladies and Gentlemen, in conclusion, let me encourage all financial institutions here to collaborate and take advantage of the opportunities offered through AfCFTA to boost the 7 country’s trade efforts. I w ish you fruitful deliberations with Afreximbank as we all do our part to realize the Africa we desire. Thank you and Akwaaba once again.