CARIFESTA has shown up the need for a seamless banking system among Caribbean nations and those on the African continent.
As he took part in one of the plenary sessions yesterday of the 32nd Afreximbank Annual Meetings 2025, Governor of the Central Bank of Barbados Dr Kevin Greenidge used the upcoming regional arts festival to highlight the issue to delegates attending the four-day event in Abuja, Nigeria.
He was one of the panellists on the discussion Building A Coherent African alongside Claver Gatete, executive secretary, United Nations Economic Commission for Africa; Milagrosa Obono Angüe, Minister Delegate to the Minister of Finance, in Charge of Treasury and State Assets, Equatorial Guinea; and John Panonetsa Mangudya, chief executive officer, Mutapa Investment Fund and former governor, the Reserve Bank of Zimbabwe. Professor Andreas Klasen, honorary research associate, University of Oxford was the moderator.
In response to a question on fostering regional harmonisation of the two markets, Greenidge reasoned that there should be an Afri-Caribbean financial system where rules and networks meshed seamlessly.
“If we have that, we can forge innovation and growth mimicking different processes,” he said.
However, the governor pointed out that each country in the Caribbean and Africa had different banking rules, so capital and banks struggled to move across each other without, among other things, unified licences and computer protection standards across jurisdictions.
“I believe we can establish mutual recognition of regulations and supervisory corporation agreements so that a banking licence in Barbados or Nigeria can operate across borders with confidence. It is a necessary step,” he told an audience that included Philip Davis, Prime Minister of The Bahamas where last year’s Afreximbank Annual Meetings took place.
He also suggested enabling cross-border banking and payments.
“This is a real problem. Right now, in Barbados, we are preparing to host CARIFESTA XV and we are getting a group from Ghana and a few others entertainers. I’ve met with them and the question is: how will African business persons come into Barbados selling a trade and get paid?”
A good example to follow in relation to this particular situation, he stated, was Afreximbank’s cross-border financial market infrastructure Pan-African Payment and Settlement System (PAPPS).
He pointed to the Caribbean-African Payment And Settlement that is being developed.
“Once established and the central bank governors agreed to expand it, it would allow seamless transfers not only around Caribbean countries, but between Caribbean countries and African countries using local currencies which, by default, reduce the need for US dollars in the transaction process and significantly reduce the time by a day or so.
“I think that is a bridge to the future. It will cut cost and currency barriers,” he said.
Chief operating officer of the Afreximbank Caribbean Office, Okechukwu Ihejirika, speaking a day earlier, said the Caribbean Payment and Settlement System (CAPS), an adaptation, was one of the success stories.
“When we say Africa and the Caribbean, we’re not just historically and culturally connected, we are also connected in terms of the kind of challenges that we have to deal with, in a sense that problems or solutions found in one area will most certainly fit into the other area. So PAPPS is that example of where we needed to create a platform that facilitates intra-regional trade and make it happen in local currencies.
“When we came to the Caribbean, we saw that there was a similar problem there, and there’s no doubt that it was actually welcomed with both hands by the committee of central bank governors,” he said.
During the panel discussion, Gatete said the situation in Africa was “very, very” critical. He pointed to the continent being “a good student” of the world order after World War II where the developed countries appeared to be looking after it.
He said in those prevailing conditions the African states with great resources got aid, concessional loans by the World Bank, the International Monetary Fund (IMF) and regional banks at the price of an IMF programme and there was no incentive to do anything.
“But then it started to crack, the aid is gone and the countries had to borrow beyond the Paris Club,” he stated, adding the countries on the continent became stuck with indebtedness.
“That requires a holistic approach we need to look at and approach it differently. There is so much to be done in the implementation of the African Continental Free Trade Area to which Afreximbank is key,” he said.
Antoinette Connell is in Abuja, Nigeria, sponsored by Afreximbank, covering the bank’s 32nd Annual Meetings.
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