The African Export-Import Bank (Afreximbank) has noted significant improvements in financial sector compliance among African countries, attributing this progress to governments implementing necessary reforms.
“This has enabled several countries to be removed from the Grey List, subsequently attracting increased foreign direct investment,” said Mr Idrissa Diop, Director of Compliance at Afreximbank, in an interview on October 24 in Cairo, Egypt.
Speaking on the sidelines of the farewell conference and Investiture ceremony, Diop highlighted Uganda as one of the countries making notable strides in compliance regarding financial sector regulation.
“Countries like Uganda have made progress regarding compliance in the financial sector regulation and they are off the Grey List, and other countries are also working to get out of the Grey List,” Diop said.
He emphasised the importance of strong compliance practices, citing benefits such as financial stability, prevention of financial crimes like money laundering and terrorist financing, and building trust with international partners.
“Yes, there is a general understanding that Africa is weak in compliance, but problems are everywhere… So, we are making progress in Africa,” Diop noted, urging a focus on the positives.
Afreximbank’s Managing Director of Trade Finance and Correspondent Banking, Ms Gwen Mwaba, stressed the need for financial institutions, particularly banks, to train their staff to understand and manage risks across different economic sectors.
“Banks need to train their staff to understand the risks… because we are lending to our clients, some of which are commercial banks,” Mwaba said.
To attract increased trade financing from Afreximbank, Mwaba advised countries or companies to have viable and bankable projects.
Addressing foreign currency challenges, Mwaba suggested African countries conduct trade in local currencies within their regions and use the US Dollar for international trade outside their region.
“Countries in the same regions of Africa should conduct trade in their local currencies and use the US Dollar for international trade out of their region,” she said.
Afreximbank recognises the role of technology in shaping economies and societies, with Diop emphasizing the need for African countries to adapt technology to meet their specific needs.
“I think in Africa when we acquire technology, we need to ensure that it is adapted to our needs and understands our specific needs,” Diop said.