• REPSS is expected to significantly contribute to the expansion of intra-COMESA trade.
• This move is expected to foster a reduction in transaction and operational costs.
• Regional payment and settlement system is a powerful tool to enhance implementation of Regional Financial Integration.
Common Market for Eastern and Southern Africa (COMESA) says the value of transactions processed on the Regional Payment and Settlement System (REPSS) has been increasing.
COMESA Secretary General Chileshe Kapwepwe stated with confidence that REPSS is a very important instrument to take lead as the preferred and strategic payment system under the Continental and Tripartite Free Trade Area arrangement as the system could also reduce the need for foreign exchange for intra-regional trade.
Ms. Kapwepwe further noted implementation of REPSS is a great milestone in COMESA’s quest to achieve regional economic integration adding that all Member States need to get on board.
She explained , REPSS is expected to significantly contribute to the expansion of intra-COMESA trade by facilitating online payments of all intra-COMESA transactions, once fully operational.
The COMESA Secretary General points out this move is expected to foster a reduction in transaction and operational costs and bring about a switching of relationships for trade transactions from between commercial banks and foreign correspondents to commercial banks and central banks thus making intra-regional trade transactions cheaper.
“I therefore would like to state with confidence that REPSS is a very important instrument to take lead as the preferred and strategic payment system under the Continental and Tripartite Free Trade Area arrangement,” said Ms. Kapwepwe.
She was speaking in her address to the symposium for the COMESA Committee of Governors of Central Banks, organized by the COMESA Monetary Institute (CMI) to deliberate on the role of financial integration for the promotion of export competitiveness in the COMESA region.
Speaking at the same event, Central Bank Governor of Egypt, Tarek Amer represented by Dr. Naglaa Nozahie, who is the Governor’s Advisor on African Affairs at the Central Bank of Egypt said Regional Financial Integration has been identified as a key element in strengthening the financial sector and regional integration as it will induce foreign direct investments and development of physical infrastructure required for enhancing intra-regional trade.
The Bank Governor stressed that despite the enumerated benefits, achieving regional financial integration is constrained by differences in national legal regulatory and oversight regimes among the member countries and inadequate harmonization of national financial integration operating schemes as well as rules and technical standards.
Mr. Amer noted the regional payment and settlement system is a powerful tool to enhance implementation of Regional Financial Integration.
“This will indeed contribute to increasing volume of trade among member countries by making trade transactions cheaper to use than that charged by correspondent banks,” he stated.
According to COMESA, Nine out of 21 countries are currently live on the COMESA Regional Payment and Settlement System (REPSS) since it was launched some six years ago.