African Export-Import Bank (Afreximbank) announced the commercial launch of Afreximbank Trade Payment Services, also known as “AfPAY,” an intervention created to make it easier for specific African financial institutions and their clients to settle international trade on open account terms.
Afreximbank developed the product primarily to solve the banking issues that African countries were facing due to the exodus of many foreign banks from the region owing to costly regulatory and compliance requirements.
A decrease in access to services provided by foreign correspondent banks that support international commerce has adversely affected financial institutions on the continent over the years. Due to the reduction in trade lines, African financial institutions’ doorways were practically shut to the rest of the world. The propulsion system of development trades; thus, if banks cannot engage in trade transactions, the African economy would expand less, and poverty will increase.
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Integrating into the global financial ecosystem will boost AfPAY development
Commenting on the new development, Mr Denys Denya, Executive Vice President, Finance & Administration, Afreximbank, said AfPAY has been in a test phase for over a year and is being utilized to facilitate monthly payments totalling over $500 million among our member states. In particular, Zimbabwe took part in the pilot by having 20 of its financial institutions implement the solution.
“African banks have, for at least a generation, been plagued by the restricted access to reputable banking partners ready to assist their cross-border trade operations,”
He continues, “We are excited to launch a product that transforms this dynamic and, in our viewpoint, will speed up cross-border commerce on this continent by establishing a connection between Africa and a global financial ecosystem that will boost its growth and development.”
About the Afreximbank
Afreximbank is a Pan-African multilateral financial organisation to finance and promotes intra- and extra-African commerce. It is also known as the African Export-Import Bank (Afreximbank). Afreximbank utilizes novel structures to provide financial solutions that assist the change of the structure of Africa’s commerce.
This helps to accelerate industrialisation and intra-regional trade, which in turn helps to enhance African economic growth. Afreximbank, a staunch supporter of the African Continental Free Trade Agreement (AfCFTA), has launched a Pan-African Payment and Settlement System (PAPSS).
This system was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is a staunch supporter of the African Continental Free Trade Agreement (AfCFTA). Afreximbank is currently developing an Adjustment Facility in collaboration with the African Union and the AfCFTA Secretariat in order to assist nations in actively participating in the AfCFTA.
At the end of the year 2021, the entire assets and guarantees held by the Bank amounted to around $25 billion, while the shareholder funds held by the Bank totalled $4 billion. Between 2016 and 2021, Afreximbank transferred more than 51 billion US dollars. The Bank has received ratings of A from the Global Credit Rating (international scale), Baa1 from Moody’s, A- from the Japan Credit Rating Agency (JCR), and A from Fitch (BBB). The Bank’s main office may be found in Cairo, which is located in Egypt.