Putting money in Afreximbank is investing in CARICOM, says PM
By Emmanuel Joseph
in Georgetown, Guyana
If you hold money in a savings account with a commercial bank you would be better off investing it in CARICOM development, Prime Minister Mia Mottley has suggested.
Addressing the AfriCaribbean Trade and Investment Forum 2023 (ACTIF23) at the Marriott Hotel in the Guyanese capital on Monday, Mottley said greater financial benefits can now be reaped by leveraging the CARICOM Development Fund’s (CDF) new shareholder status in the African Export-Import Bank (Afreximbank). Created 30 years ago by the African Development Bank to finance intra-African trade and investment, Afreximbank opened a CARICOM office in Barbados with a US$1.5 billion (BDS$3 billion) credit limit.
The prime minister told the forum’s opening ceremony that the CDF “is the glue that keeps the CARICOM Single Market and Single Economy (CSME) together”.
“If there is one great regret that I have, [it] is that it has taken us too long to be able to come up with a mechanism to allow us to be able to have… Caribbean people also be able to participate in a financing mechanism through which the CARICOM Development Fund can play [the] critical role it must play under Chapter Seven of the Revised Treaty of Chaguaramas,” she said.
That section of the CARICOM Treaty establishes a regime for disadvantaged countries, regions, and sectors within CARICOM and grants special treatment for the community’s less developed countries to improve their chances of competing.
In keeping with that, the CDF is intended to lend money to disadvantaged countries in the CARICOM at concessionary rates, Mottley said.
She reminded the audience that when the fund was established in 2008, then Prime Minister Owen Arthur under whom she served, took the responsibility to help finance it, but many others have not seen the need or urgency to support the region in tangible ways concerning CARICOM development.
“And that is why we said we needed to turn within the region and to create an opportunity where those persons who have money in savings accounts in the region and are receiving 0.0001 per cent, might well recognise there is an opportunity to get a larger percentage return on interest if they involve themselves in things pertaining to CARICOM development,” she said.
“I hope that with the work done by the CARICOM Development Fund and USAID [United States Agency for International Development]… we can get to that stage. But, more importantly, I hope that now the related-party status with the CARICOM Development Fund being a shareholder in Afreximbank, we can find innovative ways to be able to tap into the significant amount of savings and liquidity in the region that is lying dormant, not receiving proper interest rates, and not being able to work for itself, particularly in an inflationary environment such as the one in which we find ourselves today.”
The prime minister expressed the hope that more of the region’s central banks would get on board with the proposed Pan African Payment and Settlement System (PAPSS) when governors meet in Jamaica this week. PAPPS ensures instant and secure payments made by originators to beneficiaries in their local currencies, no matter where they are in their region.
“And I trust and pray, therefore, that while a few governors have already accepted the wisdom of the Pan African Payment and Settlement System we would be able to have our governors of central banks have a fuller discussion,” Mottley urged.
She recalled that the CARICOM Multilateral Clearing Facility (CMCF) – which operated from 1977 to 1983 – had been intended to facilitate trade throughout the region without the reliance on hard currency.
“It is as valid today, a problem to be resolved as it was decades ago when the CMCF was put in place,” said Mottley. “And I believe that the Pan African Payments and Settlements System is critical for us to examine because, above anything else, we need someone who is prepared to underwrite the trade and, effectively, that is what you have done with the PAPPS system in Africa, significantly improving the opportunities for trade within Africa, and we believe the same can be possible here in the Caribbean.”
She stressed the evolving relationship between Africa and the Caribbean is critical, especially at a time of much turmoil in the world, economically, socially, politically, and environmentally.
emmanueljoseph@barbadostoday.bb
