Afreximan Bank has hinted of plans to boost infrastructure development in the continent of Africa with $3 billion, The Nation can authoritatively report.
This is coming just as the bank had earlier provided the sum of $500m to support Central Banks across the West African sub region to be able to fund projects and settle transactions within the region.
The Chief Executive Officer, Pan-African Payment and Settlement System (PAPSS), Mike Ogbalu disclosed this during the Nigeria-American Chamber of Commerce (NACC), Breakfast Meeting in Lagos with the theme: “One Year of AfcTA (Opportunities, Challenges and the Nigerian- American Partnership.”
He said this fund would be there to support those settlements where there are issues with transactions including where more transactions are going in one direction.
Afreximbank is a Pan-african multilateral trade finance institution created under the auspices of the African Development Bank with the vision to be the trade finance bank for Africa.
PAPSS on the other hand is a cross-border, financial market infrastructure enabling payment transactions across Africa.
According to him, there are over 500 banks across the continent hoping to come on board, adding that the more other central bank joins, it creates a multiplier for the rest of the people.
“The more banks join, the more they create value not just for themselves but for other people in the network. Today, we are working with about 28 banks in the West African zone, we have additional 24 banks that we are looking to bring on board but we will continue like that untill we bring in more of the banks across the continent”, Ogbalu disclosed.
According to him PAPSS is working with quite a number of Nigerian banks who have presence in the West African region including UBA, Zenith Bank, and First Bank. Ogbalu said these were all member banks that had joined the PAPSS network adding they are all at different states of implementation.
Speaking with The Nation on the sideline, Ogbalu said the idea was to show the criticality of the PAPSS infrastructure to the implementation of the African Continental Free Trade Area (AfCFTA). Now, the AfCFTA is dealing with creating values that would govern the free movement of people, goods and services across the continent to support trade.
“Trade does not happen without payment, what PAPSS is trying to do is to deal with the payment challenge to make it able to support all our aspirations around trade across the continent.”
Specifically, he said, “What we’re putting in place is infrastructure that will allow transactions to originate in the local currency of one country to terminate in the local currency of the destination country. What that will do is that manufacturers businesses do not now have to worry about how to source foreign exchange to be able to do their trade.
“Now, think of it, here in Nigeria, people are happy to receive naira maybe they want to receive it in one global currency but they also don’t mind receiving in their local currency. Now, it’s the same way in Africa.
What we are trying to do is to see how we can create that bridge and make that payment even more efficient instead of going three to seven days of comparing those ordinary transactions, we want to complete it 120 services,” he added.