Trade does not happen because goods move.
Trade happens because money moves to pay for those goods.
That simple truth was at the heart of the message delivered by the Chief Executive of Stanbic Bank Ghana, Kwamina Asomaning, at the third-quarter Graphic Business/Stanbic Bank Breakfast Meeting held in Accra yesterday.
Speaking on the theme, “Moving Money.
Moving Trade. Moving Ghana – Making it easier to buy, sell and pay across borders,” Mr Asomaning made a point that should refocus the minds of policymakers, regulators and businesses alike: in today’s economy, the efficient movement of money is as important as the efficient movement of goods. He is absolutely right (Refer to front page for story).
A few decades ago, a Ghanaian manufacturer’s trade story was simple.
He bought raw materials in Ghana, produced in Ghana and sold in Ghana.
If he imported at all, it was one container from one country, paid for by one letter of credit.
That world no longer exists.
There is another dimension to this conversation that the country must confront as a matter of strategy.
As it seeks to trade more strategically with Africa and the rest of the world, we must ask whether our payment choices are themselves strategic.
For decades, cross-border payments meant one thing: convert local currency to dollars, send dollars through SWIFT, and let the recipient reconvert.
That model served its time, but it is expensive, slow and reinforces dependence on third-party currencies even when we are trading among ourselves.
The future, as Mr Asomaning noted, might not belong to one payment rail, one currency or one corridor.
It might belong to businesses that understand how to choose the most efficient route for each transaction. And that landscape is evolving rapidly
And here lies Ghana’s quiet crisis. For all the talk about AfCFTA and intra-African trade, the cost and complexity of moving money across African borders remains punishingly high.
A small and medium-sized enterprise in Makola that wants to pay a supplier in Abidjan often has to convert cedis to dollars, dollars to CFA, pay correspondent bank charges at both ends, wait for two to three days, and absorb a foreign exchange spread that wipes out its margin.
These delays and costs do not stay in the banking system.
They are eventually reflected in import prices, exporters’ margins, the working capital positions of SMEs and ultimately consumer prices.
When a trader pays more to pay, the consumer pays more to buy.
This is inflation imported through the payments pipe.
That is why we agree with Mr Asomaning’s central argument: Ghana’s efforts to expand trade with Africa and the rest of the world must consider payment systems as part of our broader trade strategy. Trade policy cannot be only about tariffs and standards. It must be about payments.
The good news is that the infrastructure is evolving, and platforms such as the Pan-African Payment and Settlement System(PAPSS) developed by Afreximbank, now allows instant payment in local currencies without routing through a third currency.
SWIFT is being upgraded, China’s Cross-Border Interbank Payment System(CIPS) is growing, and domestic systems like GhIPSS and Mobile Money Interoperability have shown that Ghana can lead in payments innovation when we are intentional.
But technology alone will not save us.
This is because the question is not technology for technology’s sake, but how innovations can be used responsibly to make international commerce simpler, safer and more efficient.
The current wave of innovation offers enormous promise.
It also carries enormous risk if regulation lags.
The Bank of Ghana must, therefore, continue to provide a progressive but firm regulatory environment.
If a Ghanaian can send Mobile Money instantly from Accra to Kumasi, there is no reason why a Ghanaian should not be able to pay a supplier in Lagos instantly in cedis that arrives as naira.
The technology exists. What is needed is regulatory push and commercial education.
Ghana wants to be the gateway to Africa under AfCFTA.
The AfCFTA Secretariat is here in Accra.
But a gateway that cannot move money efficiently is a closed gate.
We cannot move trade if we cannot move money.
We cannot move Ghana if we cannot move trade.
The time to fix the situation is now.
