‘Pilot payment system’ for intra-CARICOM, African trade
By Marlon Madden
The idea of Barbadians doing trade with CARICOM and African countries in the Barbados dollar may be one step closer to becoming a reality, the Prime Minister announced on Friday.
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, Prime Minister Mottley said.
She made the disclosure during a ceremony at the Hilton Barbados Resort at the launch of the African Export-Import Bank’s (Afreximbank) CARICOM headquarters at the Trident Insurance Financial Centre in Hastings.
Pointing to the CARICOM Multilateral Clearing Facility (CMCF), which was established in the late 1970s and came to an end by 1983, Mottley insisted 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 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.
During Friday’s ceremony, Oramah welcomed the decision to run a pilot of a new regional payment platform.
He also announced that Afreximbank was working with the CARICOM Secretariat to establish a Caribbean Export-Import Bank (Caribbeaneximbank), as he highlighted several sectors to benefit from loans from the Africa-based financial institution setting up a headquarters in Bridgetown.
“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.
