company focus
Trends in cross-border
transaction flows
SWIFT traffic data shows a disconnect between financial flows and
commercial flows. The dollar is still the most important cross-border trading
currency, but there are indications that change may be coming.
O
regions, where they share common currencies and common
n 10 September 2013, SWIFT, the financial
clearing and settlement infrastructures for payments, only 2%
messaging provider for more than 10 000 banks,
of trade settlement involves a financial intermediary outside of
securities institutions and corporate customers in
Africa – compared to 48% of intra-Africa trade settlement overall.
212 countries and territories, published a White
Christian Sarafidis, Head of Western Europe, Middle East and
Paper, Africa Payments: Insights into African
Africa, SWIFT, said: ‘Existing projects in Western and Central
transaction flows. Based on analysis of SWIFT traffic, it offers
Africa demonstrate the potentially disruptive power of regional
unique insights into transaction flows between African countries,
harmonisation, and there is significant political will for similar
and between Africa and other regions. The Paper identifies
initiatives on the African continent. Other factors could also play
environmental factors that may drive change in cross-border
a powerful role in driving change in Africa, such as an evolving
transaction flows, which could reshape pan-African banking, lead
corporate sector, regulatory pressure in
to shifts in currency usage and
developed markets and new financial market
create opportunities for multiinfrastructure.’
currency clearing in Africa.
Thierry Chilosi, Head of Banking Initiatives,
SWIFT data highlights that “fiEMEA, SWIFT, and co-author of the report,
nancial” flows do not reflect “comsaid: ‘The scenarios outlined in this paper
mercial” flows, demonstrating
will depend on a variety of different macroa disconnect between payment
economic factors, but it seems likely that, over
routes and the movement of goods
time, so many converging forces are likely to
and services, particularly between
drive significant change in banking in Africa
Africa and Asia.
and banking with Africa. The banks that will
This means that while Asia
be well positioned to grow their business in
Pacific countries are the fastest
Africa going forward are probably those that
growing trading partners for most
are already monitoring these trends.’
African countries, representing
The Paper features contributions from the
22% of all commercial flows from
Southern Africa Development Community
Africa, only 5% of financial flows
Banking Association, Nedbank Capital and
are sent directly to banks in the
Ecobank on relevant topics. It opens with
Asia-Pacific region. Conversely,
a foreword by the African Development
while banks in North America,
Bank (AfDB).
receive almost 40% of the
Moono Mupotola, Manager of Regional
payments sent by Africa, only
Integration and Trade Division, AfDB,
9% of the commercial flows are
said: ‘Boosting intra-African trade is an
destined for the North American
Christian Sarafidis, Head of SWIFT