CARICOM | Pilot Payment System established for Intra-CARICOM, African trade

MONTEGO BAY,  August 6, 2023 - Concomitant with Friday’s introduction of the regional headquarters of the African Export-Import Bank’s (Afreximbank) to the Caribbean region, has been the introduction of a new payment platform for regional trade that is not directly dependent on the US dollar.

In this regard, Barbados Prime Minister Mia Amor Mottley told a ceremony at the Hilton Barbados Resort, to launch the Afreximbank CARICOM headquarters, that the Central Bank of Barbados has agreed to enter into a partnership with the Central Bank of the Bahamas to pilot a payment platform system for trade within the region and with Africa. 

She Pointed to the now defunct CARICOM Multilateral Clearing Facility (CMCF), which was established in the late 1970s and came to an end by 1983, noting that the time had come for a replacement that would allow for the region to settle their trade with each other without having to find US dollars to do so.

“The current Governor of the Central Bank has agreed along with the Governor of the Bahamas Central Bank, to be able to anchor the piloting of a programme that will allow for trade within the region and with Africa to be taken on the basis of settling the net differences, rather than having to look for hard currency for every single transaction,” Mottley said to loud applause.

The CMCF was a centralised payments clearing and settlement accounting system that allowed CARICOM member states and firms to, among other things, use their local currencies to settle transactions.

“I mentioned the CARICOM Multilateral Clearing Facility only because had we had an entity such as Afreximbank at the time, to underwrite that facility, it might not have become dormant 30 years ago,” said Mottley.

It was in September last year, during the hosting of the first Africa-Caribbean Trade and Investment Forum in Bridgetown, that Mottley and President and Chairman of the Board of Directors of Afreximbank Professor Benedict Oramah put the plan for a new platform for settling trade in the region and with Africa on the table.

H.E. Prof. Benedict Oramah, President & Chairman of the Board, Afreximbank, delivered the opening remarks at the Afreximbank CARICOM Office opening. pic.twitter.com/ADBDTA5JSp

— Afreximbank (@afreximbank) August 4, 2023

Professor Oramah welcomed the decision to run a pilot of a new regional payment platform, and announced that Afreximbank was working with the CARICOM Secretariat to establish a Caribbean Export-Import Bank (Caribbeaneximbank).

The Afreximbank Chairman highlighted several sectors to benefit from loans from the Africa-based financial institution  indicating that:“Currently in the pipeline, we have several transactions across tourism and hospitality, creative industry, financial services, energy, agribusiness, infrastructure, shipping and cruising, airlines and many others,” said Oramah.

“We are also working with the CARICOM Secretariat to set up the Caribbeaneximbank as endorsed by the 44th regular meeting of the Conference of Heads of Governments of the Caribbean Community,” he said.

He said he was hoping that the establishment of Afreximbank’s CARICOM headquarters here would serve as an encouragement to other agencies including the Fund for Export Development in Africa, to establish a presence here.