Africans have a collective responsibility to put in place frameworks that would foster economic growth on the continent, Danny Faure, Vice President of Seychelles, said today in Mahe in Seychelles.
Declaring open the second Annual Customer Due Diligence and Corporate Governance Forum organised by the African Export-Import Bank (Afreximbank), Mr. Faure said that such frameworks would lead to the establishment of environments in which winners could grow in order to lead to improved living standards for all.
He said that Seychelles was committed to devoting the time and effort to develop customer due diligence and corporate governance principles and was already working to beef up its legislation to incorporate those principles. The country recognised that the private sector held a lot of the power for growth and, as such, had a strategy that counted on small and medium sized enterprises as the backbone and engine of growth.
Dr. Benedict Oramah, President of Afreximbank, told participants that the adverse effects and costs resulting from new regulatory challenges in the global financial environment had been significant for African countries, particularly with regard to trade, trade finance, economic growth and development.
According to him, the new regulatory challenges have increased the marginal cost of trade financing by global banks because to the fact that, although none of the fines that had been levied under these regulations had been for dealing with an African country, international banks are now unwilling to expose themselves to such risks, especially in what they consider high risk jurisdictions that contribute very little to their overall revenues.
Because of its raison d’être, and its responsibility to remove the constraints to trade and trade finance for African entities, Afreximbank had launched a African Customer Due Diligence Repository Platform (ACDIRP) with the aim of providing a centralized single source of primary data required to conduct customer due diligence checks on African counterparties, explained Dr. Oramah
“Ultimately, the platform will make it possible for lenders, who are participating in the arrangement, to have access to important information needed to undertake their due diligence and, therefore, reduce their costs of compliance,” he said, noting that a decrease in cost of compliance would lead to a decrease in the cost of trade finance in Africa and, therefore, increased access to trade finance.
Afreximbank was also expanding activities under its African Correspondent Banking initiative which delivers a co-branded product targeted at expanding access of African banks to correspondent banking services tailored to their specific needs.
Jean Paul Adam, Minister of Finance, Trade and the Blue Economy of Seychelles, said that the country valued its partnership with Afreximbank, noting that that relationship had been a longstanding one that had seen Afreximbank standing by Seychelles for many years.
Caroline Abel, Governor of the Central Bank of Seychelles, said that for the future of the African continent, it was imperative to achieve success in building confidence in order to attract more investment and greater economic activities for domestic businesses. Because Seychelles was dependent on foreign direct investment, it had spent time in improving business practices and bringing corporate governance to international standards, including improving the standards that governed financial services.
Seychelles had issued corporate governance guidelines this year to provide banks with framework for best practices within sector, she added.
The Forum, which is being organised in collaboration with the Central Bank of Seychelles, follows an initial edition held in Dakar from 28 to 29 October 2014, which led to the establishment of ACDIRP.
The Forum is being attended by more than 200 bankers, corporate entities, regulators and representatives of financial institutions from Africa and beyond and is featuring expert presentations and panel and open discussions on customer due diligence and corporate governance challenges faced by African institutions.
Subjects being covered include: Architecture of African customer due diligence; illicit financial flows and capital flight; terrorism and illicit trafficking; corruption and public governance; corporate governance in Africa; emerging corporate governance best practices in Africa; and approach to improving corporate governance in Africa.
Manal Mounir Hendy