How banks are facilitating intra-Africa trade finance and cross-border transactions

By Busara Raymond

The introduction of the African Continental Free Trade Area (AfCFTA) is a watershed moment in the development of intra-Africa trade. This ambitious trade treaty was created to establish a single market for goods and services across Africa, boost economic integration and industrialization.

Many businesses, especially small medium enterprises are now able to exploit the vast economic opportunities presented by this new economic framework. It has enabled the reduction of tariffs and other trade barriers between member countries and promotes a more stable business environment through harmonised regulations. Small businesses also stand a chance to be more competitive on the global stage.

Standard Chartered recognises the potential benefits AfCFTA can provide economies across. As a result, we are already leveraging our regional presence to help our clients initiate and effect cross-border transactions while expanding their scope of operations.

Our presence in key markets like Tanzania, Kenya, South Africa, Nigeria and Ghana is critical in helping businesses connect with major economic hubs across the continent. Businesses keen on expanding into new territories can rely on us for a host of financial solutions including trade financing, forex solutions, and digital platforms that streamline transactions.

We have also leveraged our strategic partnerships with important financial institutions to strengthen local banking systems, minimise delays and boost supply chains. Engaging regional partners also helps us utilise local market knowledge that is critical towards boosting client confidence and providing insights that will help make informed business decisions. Navigating foreign markets, especially across Africa’s diverse economic landscape, requires a financial partner that has the infrastructure in place to facilitate seamless integration into new markets.

The adoption of digital payments across various levels of African's economy has played a critical role in the rise cross-border payments, further solidifying regional economic blocs like the East African Community (EAC) and the Southern African Development Community (SADC). The sheer volume of trade within these blocs requires a robust and efficient international payment platform that delivers in real time and executes transactions in multiple currencies.

Businesses can utilise Standard Chartered's fully integrated Straight2Bank platform which provides them with global access and can be customised based on individual business needs. This platform supports various payment methods, including regional real-time gross settlement (RTGS) flows which are East African Payment Systems (EAPS) which supports settlement of East African Community currencies and SADC RTGS, the platform also facilitates real-time transaction status notifications and automated reconciliation leveraging on latest API technology helping with audit and financial reporting procedures.

To support the operationalization of AfCFTA, the African Union has also taken an initiative to implement the Pan-African Payment and Settlement System (PAPSS), a cross-border infrastructure enabling payment transactions across Africa. This initiative whose roll out is done in phases is one that aims at simplifying payments, Standard Chartered Bank welcomes such initiatives aimed at providing an opportunity to increase intra – Africa trade with efficient payment services.

Furthermore, International transactions involving large sums of money are fraught with risk hence we have put in place measures to ensure that your financial operations are secure. We employ a comprehensive approach to ensure the security and stability of payment systems, integrating advanced technologies that counter evolving security threats, continuous and elaborate monitoring, and proactive client education.

As AfCFTA continues to enhance Africa's overall economy and bridge the financial gap, companies can unlock new opportunities by relying on Standard Chartered to help them scale their cross-border payments, introduce new trade products for SMEs, support local currency trade settlements and expand infrastructure and trade financing.