African countries have been urged to review regulatory frameworks that hinder intra-African trade among their respective countries.
Speaking in an interview with a section of the media on the sidelines of the ongoing 26th edition of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) African Regional Conference (ARC) in Accra yesterday, Mr Alain Raes, Chief Executive, EMEA & APAC, SWIFT said the removal of the bottlenecks would go a long way to ensure effective regional integration.
SWIFT's African Regional Conference is Africa's leading financial services event that brings together more than 550 financial service professionals from more than 55 countries.
Delegates are discussing Africa's evolving payments landscape, how the financial industry is embracing and delivering change for its customers, and how to manage risk in an increasingly digitised world.
He said Africa's numerous border and customs posts, with the associated bureaucracy and long delays, continues to hold back trade and economic growth.
The high number of checkpoints he said, was impeding trade and needed to be addressed as it adds to the cost of doing business.
He said African countries must also leverage technology to facilitate trade in Africa.
SWIFT, he said, had expanded to more African countries and ensuring that banks on the African continent was connected among themselves and the rest of the world.
He said there have been discussions with some banks in Ghana, Nigeria among others to help them to develop and operate high value domestic payment system.
In his welcome address, Mr Sido Bestani, Regional Director, Middle East, Turkey and Africa, SWIFT, said while intra-African trade was still below 15 per cent, there were some promising signs of this turning around, based on SWIFT data, published last year.
He said the recent signing of the Continental Free Trade Area (CTFA), the largest trade agreement since the launch of the World Trade Organisation in 1995, was a major step towards building a 'borderless Africa'.
"If all 55 African states were to sign the deal, it would cover a market of more than 1.2 billion people, including a growing middle class, and a combined GDP of more than $3,400 billion and has the potential to boost intra-African trade by more than 52 per cent through the elimination of import duties; economists argue this increased trade could be doubled if non-tariff barriers are also reduced. It's a step forward, but there is some way to go," he said.
Mr Bestani said even though natural resources remained the biggest contributor for growth in Africa, making it commodity dependent, notable progress had been made in diversifying economies across the continent.
"For example, Mauritius transformed its economy from sugar-dependence into being a regional financial services hub. Botswana is striving to diversify by developing as a diamond cutting, polishing and marketing centre. Rwanda is slowly becoming an innovation and technology hub while Ethiopia is poised to become a manufacturing hub," he said.
He however, stated that in order to export these goods, whether raw or finished products to Africa or further afield, good infrastructure was essential.
"The good news is that investment continues to pour into Africa. Flows to the continent rose to US$46 billion in 2018, an increase of 11 per cent on the previous year, according to UNCTAD's 2019 World Investment Report. Africa's trading relationships are also evolving. Over the past decade, trade has begun to move away from developed countries and towards other emerging economies including India, Indonesia, Russia and Turkey. China of course continues to play a significant role," he said.