NASSAU, Bahamas, CMC — 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.
CARICOM Chairman and Guyana’s President, Dr. Irfaan Ali, told the 31st Afreximbank Annual Meeting and the Third AfriCaribbean Trade and Investment Forum (ACTIF2024), which 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 important,” Ali told the meetings attended by several 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 our potential to find the solutions that are required of us. And that is what this forum offers us: understanding each other and building trust. We are on a good platform for building trust between Africa and the Caribbean. Let us take this forward to greater heights,” he said.
At the bank’s third annual meeting in June 2023 in Ghana, Mottley praised PAPSS, which allows countries across the continent to trade 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 intended to facilitate inter-regional trade.
“But unlike PAPSS, there was no guarantor, and therefore, when a country got into difficulties concerning liquidity, it meant that that money remained owing,” The Barbados Prime Minister explained at the Ghana meetings.
“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 we are trading,” Motley said.
Ali noted the changes in the three years since Afreximbank began expanding to the CARICOM region in his address.
“Three years ago, we would have seen only a few sophisticated African investors in this region. Fast forward to today, we have seen that since AfriExim Bank came on board in this region, more than 50 African delegations are 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 realization of the opportunity and potential 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 look at the region in terms of its population and 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 agreements.
He said CARICOM sometimes takes this important fact for granted, adding that in the United States, the aquaculture market is four billion US dollars, and countries in the regional bloc are in the top two percent in terms of natural competitiveness for aquaculture.
The CARICOM region also has an advantage regarding 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, whose yearly average wind speed is 5.5 meters per second.
“Those are advantages that we possess in this region. Imagine if Africa could come together, mobilize capital, and manufacture, and we would 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 make the world understand that there must be 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 percent 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 trade the credit in the forests. We are going to create new areas of wealth. If you look at the biodiversity and the marine economy in this region, we have to shape the conversation, and that is our power.”
On Wednesday, Governor of the Central Bank of The Bahamas John Rolle urged the Caribbean to take advantage of Afreximbank’s presence in the region, noting the opportunities for Africa and the Caribbean.
“This gathering represents a great opportunity to leverage the shared history, identity, 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.”.
and then  finance minister and central bank governors will meet next week ahead of the annual heads){kind=link}