The global financial systems are posing challenges for Africans, hindering their participation in the global economy, according to Aigboje Aig-Imoukhuede, Chairman of Coronation Capital and former Group MD and CEO of Access Bank. Aig-Imoukhuede expressed his concerns on the podcast “The Flip Africa,” highlighting the exclusion of 1.6 billion Africans from payment systems and global citizenship opportunities.
He emphasized the unfairness of the high-risk premiums placed on Africans in international transactions, attributing it to a system that enforces conformity. Aig-Imoukhuede pointed out that the world views non-conformity as a higher risk, citing examples such as the requirement for zip codes in credit score processes, which are scarce in Africa.
The influence of countries with global economic power in dictating rules within the financial system was emphasized by Aig-Imoukhuede. He noted that the rules set by those with economic power impact African banks’ limited membership in global payment systems like SWIFT. This lack of representation results in challenges for Africans living with rules set by others.
Aig-Imoukhuede revealed that only a few African banks are members of the global payment systems due to the dominance of countries with economic power. This lack of representation has consequences, with African banks having to go through intermediaries for international transactions, leading to additional requirements and hurdles, such as the demand for zip codes.
Illustrating the issue, he described a scenario where a Nigerian bank in the UK, not part of the UK clearing system, must route payments through a UK bank. The UK bank then imposes conditions, requiring evidence of zip codes for all customers, creating a disadvantage for African banks.
Currently, only 32 African banks are live on Swift Go, a fraction of the 847 banks subscribed to the platform and less than 5% of the 763 banks in Africa. Swift Go, a “lite” version of SWIFT, facilitates low-value payments for SMEs and individuals globally.
The Executive Summary from the African Development Bank and the World Bank report, “Financing Africa: Through the Crisis and Beyond,” emphasizes that integration into global financial markets has been a contentious issue in financial sector policy worldwide, particularly after the 2008 global financial crisis.
