CARICOM Leaders to Explore Afreximbank Payments System for Enhanced Regional Trade Leaders from the Caribbean Community (CARICOM) are set to deliberate the potential benefits of adopting the African Export-Import Bank’s (Afreximbank) Pan-African Payments and Settlement System (PAPSS) for facilitating regional trade. The discussion will take place during the 34th Inter-Sessional Meeting of CARICOM Heads of Government, scheduled to be held in The Bahamas. The implementation of PAPSS is anticipated to streamline cross-border payments, reduce transaction costs, and enhance efficiency in regional trade. PAPSS is a cutting-edge digital platform that enables real-time, secure, and cost-effective cross-currency payments across Africa. It eliminates the need for correspondent banks, thereby reducing transaction time and fees. The system currently connects 38 African countries and is expected to be expanded to include Caribbean nations. By adopting PAPSS, CARICOM members would gain access to a robust payment infrastructure that can facilitate intra-regional trade transactions, reducing their dependence on third-party financial institutions. This could lead to significant savings in foreign exchange and transaction costs. Moreover, PAPSS offers interoperability with other global payment systems, allowing CARICOM businesses to seamlessly connect with international markets. This connectivity can boost exports and attract foreign direct investment, fostering economic growth within the region. In addition, PAPSS promotes financial inclusion by enabling small businesses and individuals to participate in regional trade. The platform reduces the barriers to entry for cross-border transactions, making it easier for entrepreneurs to expand their operations beyond their home countries. The exploration of PAPSS by CARICOM leaders is a testament to the region’s commitment to fostering economic integration and enhancing trade competitiveness. The adoption of the system would represent a significant step towards achieving these goals, creating a more vibrant and prosperous Caribbean economy.CARICOM finance ministers and central bank governors will meet next week in preparation for the annual meeting of heads of government in Grenada in July.CARICOM finance ministers and central bank governors will meet next week in preparation for the annual meeting of heads of government in Grenada in July. Key on the agenda is the exploration of Afreximbank’s Pan African Payments and Settlement System (PAPSS) for regional commercial payments. This initiative aims to address long-standing concerns about the existing payment settlement system. Leadership initiatives CARICOM Chairman and President of Guyana, Dr. Irfaan Ali, announced at the 31st Annual Meeting of Afreximbank and the Third African-Caribbean Trade and Investment Forum (ACTIF2024) that all CARICOM countries had expressed their dissatisfaction with the current system. As a result, Dr Ali, together with Prime Minister Mia Motley, Chairperson of the CARICOM Single Market and Economy (CSME), has organized a meeting with finance ministers and governors to discuss the adoption of the PAPSS for regional payment settlements. Build trust and leverage existing systems During the opening ceremony of the three-day meetings, Dr. Ali emphasized the importance of trust and leveraging existing systems rather than creating new ones. He highlighted the need for mutual trust between CARICOM members and the potential benefits of using the PAPSS system, which has already proven successful in Africa. Historical context and advantages of PAPSS Prime Minister Mia Motley of Barbados highlighted the challenges CARICOM faced decades ago with a similar multilateral compensation mechanism that lacked a guarantor. In contrast, PAPSS offers a guaranteed mechanism, making it a more viable option to facilitate interregional trade. Motley’s insights drawn from the 2023 Afreximbank meetings in Ghana underscored the potential of PAPSS to revolutionize trade within CARICOM by allowing transactions in local currencies. African investment in the Caribbean Dr Ali has noticed significant changes since Afreximbank began expanding in the CARICOM region three years ago. The presence of more than 50 African delegations exploring business opportunities in the Caribbean is a testament to the growing interest and investment of African entities. This interest was further highlighted by the attendance at annual meetings of prominent figures such as Aliko Dangote, the richest person in Africa. Opportunities and potential in CARICOM Dr. Ali addressed misconceptions about the small size of the CARICOM market, emphasizing the region’s potential to provide access to more than one billion people through various relationships and trade agreements. He highlighted the region’s advantages in aquaculture, renewable energy and its competitive natural resources. Renewable Energy Outlook The CARICOM region has significant advantages in renewable energy, with an average of 2,755 hours of sunshine per year and high wind speeds in certain territories. These conditions present substantial opportunities for solar and wind energy projects, which could transform the region’s energy landscape. Vision for a sustainable future Dr. Ali also discussed the potential for CARICOM and Africa to collaborate on environmentally sustainable projects, such as manufacturing electric vehicles with minimal environmental impact. He highlighted the marketing advantage of producing electric vehicles in the region with the smallest environmental footprint. Carbon credits and forest conservation The CARICOM president highlighted Africa’s vast forest resources and low deforestation rates in regions such as Suriname and Guyana. By integrating these forests into a carbon market, the region could create new areas of wealth and significantly impact global carbon trading. Economic transformation and global impact The Governor of the Central Bank of The Bahamas, John Rolle, encouraged the Caribbean to take advantage of the opportunities presented by the presence of Afreximbank. He highlighted the importance of harnessing shared history, identities and cultures to strengthen trade and investment links between Africa and the Caribbean, especially in the current world of polycrisis.CARICOM leaders are set to discuss the use of the Afreximbank payments system for regional trade. This will be one of the main agenda items at the upcoming CARICOM Heads of Government meeting. The Afreximbank payments system is a pan-African payment and settlement system that allows for the transfer of funds between banks across Africa. It is designed to facilitate trade and investment within the continent. If adopted by CARICOM countries, the Afreximbank payments system could help to reduce the cost and time it takes to conduct cross-border transactions within the region. It could also help to promote trade and investment between CARICOM countries and the rest of Africa. The use of the Afreximbank payments system will be discussed alongside other measures to boost trade within CARICOM. These include the implementation of a single market and economy, the harmonization of customs procedures, and the establishment of a regional transportation network. The CARICOM Heads of Government meeting will be held in Barbados from July 3-5.