Digital payment systems can ease currency depreciation – Oakwood Green CEO

Ghana’s exchange rate pressures can be lessened through intra-African trade on digital payment platforms, the Chief Executive Officer (CEO) of Oakwood Green Africa, Mr Gabriel Edgal, has said.

He explained that the demand for foreign currency would decline and local currencies strengthened when payments were made utilising intra-trade digital platforms.

He said that would result in a reduction in the frequent exchange rate pressures that Ghana and other African nations experienced.

“With intra-trade digital platforms, importation of our inputs will now be cheaper and imported inflation will now be reduced, as the local currencies will be more resilient due to increased demand in local currency trading,” Mr Edgal said.

He was speaking at the launch of the Africa Trade Gateway, as part of activities during the just ended 2023 African Export-Import Bank (Afreximbank) Annual Meetings in Accra.

The Gateway – a collection of five digital platforms and a single window is to make Afreximbank to better provide essential services to support and promote the actualisation of the African Continental Free Trade Area (AfCFTA).

Mr Edgal encouraged Ghanaian businesses to frequently use Afreximbank’s Pan-Africa Payment and Settlement Systems (PAPSS) and MANSA, both of which are digital trade payment platforms.

“Through initiatives like PAPSS, businesses in Ghana, can trade with their counterparts anywhere in Africa without having to convert their local currencies to the dollar,” he said.

“The MANSA Platform will also boost businesses and help grow the economy significantly, as some of the bottlenecks that have bedevilled intra-Africa trade for so long will be eliminated,” he added.

By using platforms such as PAPSS and MANSA, users would be provided with convenient access to a single source of primary data, customers, suppliers, and partners without incurring additional cost, he said.

It would also give access to information on Customer Due Diligence and Know Your Customer checks on African entities, including financial institutions, corporates, and Small and Medium-sized Enterprises (SMEs).

He said: “We need to start asking ourselves questions as Africans, such as; ‘how is it that trade with my neighbour just across the border has to be painstakingly difficult?” 

“We must also ask why can I not benefit from the large markets for my products that Africa provides?’… ‘Why is my focus only on international trade, imports that leaves us as consuming nations instead of producing nations?” he quizzed.

The Oakwood Green CEO said that the time had come for Africans “to think Africa, and trade among ourselves.”

Dr Ernest Addison, Governor, Bank of Ghana (BoG), in a speech, said that the world had entered into an era characterised by digitisation and digital transformation.

“Africa must seize this opportunity to boost economic growth and foster regional integration through enhancing digital infrastructure, digital entrepreneurship and innovation and promote digital skills development,” the Governor said.

“We invite all financial institutions and private businesses to actively participate in these initiatives and harness the transformative power of digitalisation. Together, we can shape a prosperous future for Africa,” he added.