Digital financial inclusion is key to growing trade within Comesa

Trucks at Mombasa Port

Cargo trucks on the queue between Portreitz and Dongo Kundu overpass heading to the Port of Mombasa to pick cargo in this picture taken on May 14,  2020. 

Photo credit: File | Nation Media Group

As the largest trade bloc on the continent, the Common Market for Eastern and Southern Africa (Comesa) holds immense potential for driving economic growth, fostering regional integration, and lifting millions out of poverty.

Comesa's trade statistics paint a picture of immense opportunity coupled with significant challenges. While the region exported goods worth $205 billion and imported goods valued at $ 272 billion in 2022, it also faced a trade deficit of $67.5 billion.

Furthermore, intra-Comesa trade, though substantial, remains below its true potential, with its exports and imports standing at $14.1 billion and $14.2 billion, respectively.

Despite the region's economic potential, challenges persist in strengthening trade facilitation mechanisms to ensure sustainable value chains and seamless supply chains across borders.

As such, the Comesa Business Council (CBC) has embarked on a mission to implement a digital financial inclusion programme aimed at designing, developing, and deploying an integrated digital financial services infrastructure.

One crucial step in this journey is the development and deployment of a digital retail payment platform.

This initiative is further aimed at offering a transformative solution to enhance economic resilience and sustainability within Comesa.

Leveraging digital technologies to expand access to financial services, particularly among micro, small, and medium-sized enterprises (MSMEs), women, and youth, will catalyse inclusive growth and empower marginalised communities across the region.

At its core, the digital financial inclusion programme addresses fundamental barriers that hinder economic participation and impede the flow of goods and services within Comesa. It seeks to provide low-cost, interoperable, real-time, and fraud-resistant financial services to enable MSMEs to access formal financial channels, manage their finances more effectively, and seize new business opportunities.

Moreover, by targeting women and youth who are disproportionately excluded from traditional financial systems, programme seeks to promote gender equality and youth empowerment, unlocking untapped reservoirs of talent and innovation.

The benefits of digital financial inclusion extend far beyond individual entrepreneurs and businesses; they have the potential to drive broader economic transformation within Comesa.

A robust digital financial infrastructure will facilitate seamless cross-border transactions, reducing transaction costs and enhancing the efficiency of supply chains, thereby promoting regional integration and boosting intra-Comesa trade.

Moreover, by fostering a conducive environment for entrepreneurship and innovation, digital financial inclusion nurtures a thriving ecosystem of startups and SMEs, driving job creation, economic diversification, and sustainable development across the region.

In the context of the Continental Free Trade Area (CFTA), of which Comesa is a vital part, digital financial inclusion assumes even greater significance. As Member States strive to harmonise trade policies and eliminate barriers to trade, a resilient digital financial infrastructure serves as a linchpin for facilitating the smooth flow of goods, services, and capital across borders.

Therefore, by bridging the gap between informal and formal economies, the Digital Financial Inclusion program will promote transparency, accountability, and good governance, laying the foundation for a thriving regional economy built on trust and cooperation.

As part of the deployment process, CBC is also working to develop robust regulatory frameworks and policy guidelines to govern the operation of the Digital Retail Payment platform. These frameworks ensure compliance with international standards, protect consumers' rights, and promote trust and confidence in digital financial services.

However, as CBC embarks on this transformative journey, collaboration and partnership will be key to overcoming challenges and maximising the socioeconomic impact of this initiative. Stakeholders, including governments, must enact conducive regulatory frameworks that foster innovation, protect consumer rights, and ensure the integrity of digital financial systems.

Financial institutions and technology providers must collaborate to develop tailored solutions that address the unique needs and preferences of Comesa's diverse population. Civil society organisations and development partners must advocate for inclusive policies and provide support to vulnerable communities, ensuring that no one is left behind in the digital transformation.

As Comesa embarks on this transformative journey, let us seize this opportunity to actualise prosperity for all Member States and build a brighter tomorrow for generations to come.

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