January 1, 2021 was a great day for Africa. Following a coronavirus-induced delay, the African Continental Free Trade Area (AfCFTA) came into full effect. It is the flagship project of the African Union’s Agenda 2063, a blueprint for attaining inclusive and sustainable development across the continent over the next 50 years.
It is loosely modeled after the 1994 update of the General Agreement on Tariffs and Trade (GATT), the precursor to the World Trade Organization (WTO), and much has been said about the potential impact of the agreement.
Whilst some critics have pointed to a number of deficiencies in individual countries and the continent at large, the enormous potential of the agreement to see the centuries-long transformation of the continent in a few decades far outweigh any current deficiencies and serves is serving as a much-needed impetus for various stakeholders.
When fully operational by 2030, the region could be the world’s biggest free-trade zone by area, with a potential market of 1.2 billion people and a combined gross domestic product of US$2.5 trillion and according to the World Bank, an Africa-wide free-trade pact could boost the continent’s income by some US$450 billion and lift 30 million people out of extreme poverty by 2035.
As with any transformation, there will invariably be winners and losers, coupled with great uncertainty. It is at such time that stakeholders; governments and businesses - multinationals and Micro, Small and Medium-sized Enterprises (MSMEs) - need strong institutions. They require organisations with a proven track record of innovation, sustainability, and resilience to represent their best interests.
The Role of Zenith Bank
For more than two decades, Zenith Bank has been at the forefront of digital banking; providing best-in-class customer products and services by applying cutting-edge Information and Communication Technology (ICT) solutions, scoring many firsts in the process.
Zenith’s experience in the area of technology, coupled with its physical presence in West Africa (Ghana, Gambia, Sierra Leone, Nigeria) as well as correspondent banks and digital presence in various countries on the continent, serves as the solid foundation upon which it is erecting pillars to best serve businesses to make the most of AfCFTA. These pillars are:
- Education and sensitisation
With regards to international trade, there are various protocols and rules such as the Protocol on Trade in Services, Rules of Origin (RoO), Delivery Ex Quay (DEQ), Waiver of Obligations, Protocols on Investment, Intellectual Property Rights, Competition Policy amongst others. The understanding of these and many other concepts represents one of the biggest challenge businesses, particularly, smaller businesses that have had limited direct exports will face in their quest to benefit from AfCFTA.
Acutely aware of the possibilities of exploitation due to lack of knowledge, Zenith Bank has embarked on a series of aggressive sensitisation drives for potential direct stakeholders. With access to a wealth of experts, who have excelled in their respective spheres of discipline, Zenith has leveraged technology to make these sessions available, even to persons who are geographically distant.
The Bank has partnered with the Ghana Export Promotion Authority (GEPA) for the Authority’s regional sensitization tour with exporters and other business on the opportunities of AFCFTA and the support the Bank can provide in the areas of lending opportunities, provision of trade products such as Letters of Credit, export Letters of Credit, Bills for collection, etc.
The Bank has additionally collaborated with GEPA to educate customers on the Authority’s Impact Hub (i.e. a one-stop shop on all services of AFCFTA and other export information). Customers of the Bank have additionally benefited from the Bank’s webinars on the opportunities that AFCFTA presents. As a result, complex concepts have been distilled into easy bite-sized pieces of information, with very relatable examples from the existing cultural contexts. The response has been overwhelming. Zenith Bank will not relent on this initiative. The Bank will also provide tailor-made advisory services to both customers and non-customers, until the dynamics of AfCFTA become common knowledge.
- Payments and Settlements
Payments and settlements remain a bane in international trade and AfCFTA is no exception. This is especially true in an area like that of AfCFTA, where there is no common currency. With the local regional bloc, ECOWAS, announcing that the proposed common currency for the region, the ECO, would be in force in 2027, it is safe to assume that the problem of various currencies and finding a consensus on payment will exist in the short to medium term, and perhaps, even longer.
With its extensive coverage and by leveraging in-house digital solutions as well as in collaboration with strategic partners, Zenith’s solutions are instrumental in supporting businesses, particularly SMEs, to overcome the many challenges presented by the highly fragmented and complex payment and banking infrastructure. Its cross-border payment and settlement solutions would see business partners receive payments in the currency of the choice - cedis, naira, CFA Franc, USD, British Pounds, Yen, amongst others.
The Bank’s web-based online collection platform and marketplace, Zenith GlobalPAY, enables businesses to sell their products and receive payments from customers across the continent and the world via payment cards such as Visa or Mastercard. Users can trust the high level of security on this platform; every transaction between merchants and buyers are secured. Zenith Bank’s Point of Sale (PoS) terminals also conveniently enable businesses to receive payments from visitors from other countries to Ghana through the use of their Mastercard or Visa cards. Zenith POS terminals also allow for either of the following verifications: Biometric, PIN, and signature. Merchants can be assured of real-time settlement, great reduction in cost of handling cash and a 24-hour accessibility when they sign up for a Zenith PoS terminal.
For corporate customers of the Bank, the Zenith Corporate Internet Banking platform (CIB) provides a safe channel for all electronic banking transactions from the comfort of the home or office. Users can log in and carry out their business transactions at any time of the day. The platform gives users a variety of payment options which include card payments, instant transfers as well as e-wallet and direct debits. There is also no limit to the number of times transfer can be made. A special feature is also enabled to allow for the setup of multiple signatories’ approval for all or some amounts of payments. Irrespective of the location of signatories, they can log in to Zenith Bank’s CIB platform and approve payments. The most critical feature to note about Zenith CIB is the two-factor authentication that requires additional verification beyond account login details. This has been put in place to guard against instances where login details may be compromised.
- Transparency and Security
There exists the clear and present danger of increased incidents of illicit financial flows under the guise of AfCFTA. With it comes the likelihood of more intense scrutiny of payments that occur on the continent. To curtail this, key departments of the Bank carry out the necessary due diligence to prevent the likelihood of unlawful trade activities. The Bank’s Foreign Operations department thoroughly ensures all inflows received are backed by the required documentation before accounts are credited. Zenith Bank’s Trade department also ensures all foreign transfers and trade transactions are backed by the requisite supporting documents before any transactions are effected. The Compliance Department of the Bank has the mandate of scrutinizing all account opening documentation to ensure they meet global Anti-money laundering and KYC standards.
Driven by a culture of excellence and strict adherence to global best practices and good corporate governance, Zenith Bank is committed to ensuring that all payments made through its platforms are religiously scrutinized and verified. The introduction of high-tech solutions will accurately ensure that the falsification of documents and other anomalies are detected at the first presentation and duly referred to the appropriate quarters.
- Access to credit and market
Ask small businesses what tops their list of wishes and it is often access to credit. Whilst not oblivious to the desires of businesses and having done much in this regard, financial intermediaries have been constrained by the largely informal nature of small businesses and, hitherto, the pitiable bookkeeping. Knowing that credit does not only allow businesses to grow their supplier base, but it also allows them to grow demand, Zenith has rolled out and will continue to deploy the technology of tomorrow to enable businesses to gain access to more credit, as it obtains more data on customers and suppliers. These tools will also prove vital in linking businesses with the ideal customer base. As we enter into uncharted waters for trade on the continent, especially off the back of the debilitating socio-economic impact of COVID-19, conventional wisdom suggests that businesses are guided by what is historically proven and Zenith Bank is that and much more.
Zenith Bank Ghana is a subsidiary of Zenith Bank Plc with its Head Quarters in Lagos, Nigeria. It has presence in Sierra Leone, The Gambia, United Kingdom, Dubai as well as a representative office in China.