NAIROBI (Xinhua) --
The Common Market for Eastern and Southern Africa
(COMESA) on Friday decried the low use of regional payment and
settlement system for intra-regional trade.
clearing house executive secretary Mahmood Mansoor told Xinhua
in Nairobi that the payment for the bulk of the 8 billion U.S.
dollars in intra-COMESA annual imports is conducted through
correspondent banks in the United States and Europe.
"As a result, the region pays transaction fees of up to 400
million dollars to foreign banks annually due to lack of use of
the regional payment and settlement system," Mansoor said.
Currently, 21 African countries in East, South and North
Africa are COMESA member states.
The COMESA clearing house has been operating a regional
payment system for the past five years that allows member
states’ central banks to guarantee payment for intra-COMESA
trade and thereby eliminate the need for use of correspondent
banks outside the region.
Mansoor said only 5 million dollars of COMESA imports is
conducted through the COMESA clearing house every year.
Intra-regional trade remains expensive as traders involved
prefer to use letters of credit, which attract a 5 percent
transaction fee, he said.
"Through the COMESA Clearing House, traders don’t have to use
letters of credit and hence it results in lower cost of trade,"
The COMESA official noted that most of the bloc’s member
states have liberalized their economies and therefore central
banks cannot dictate how payments for cross-border trade are
The regional bloc plans to roll out a sensitization campaign
to increase the use of the cost-effective regional payment and