Addis Ababa, 31 May 2022 (ECA) – The Economic Commission for Africa (ECA), in collaboration with Bank of Zambia (BOZ), and Stichting Frontclear Technical Assistance Program (Stichting FTAP), a foundation for money market development initiatives and partner of ECA, organized a 2-day workshop to kick-off the Tradeclear Feasibility Study in Zambia. The workshop took place 16-17, May 2022 and was followed by two days of market interviews.
Money markets in many African countries face the challenge of segmentation and are underdeveloped. Tradeclear is an Umbrella Guarantee Facility that would mitigate the counter-party credit risk in interbank transactions and improve market participation, depth, and liquidity. It is designed to resolve market segmentation and build trusted credit lines. By doing so, funding and risks are better distributed in the financial system, improving monetary policy transmission, and contributing to the overall resilience of the economy.
It is against this backdrop that ECA launched the technical assistance project on Tradeclear feasibility study for Zambia, in collaboration with Frontclear. The workshop was an opportunity to introduce the concept and structures of Tradeclear to over 40 participating bank stakeholders and to begin data and information gathering.
Jacob Mkandawire, Deputy Director of Financial Markets Department at the BOZ, who opened the workshop on behalf of the director, Isaac Muhanga, welcomed the support from ECA and Frontclear on the feasibility study that could help develop and deepen the money market in Zambia.
Sheng Zhao, Economic Affairs Officer, ECA, introduced ECA’s role and efforts to help member States develop their domestic financial markets. Mr Zhao gave an overview of the technical assistance project on Tradeclear feasibility study in Zambia.
A team from Frontclear, including CEO, Philip Buyskes, and Senior Vice President,Ingrid Hagen, delivered presentations on Tradeclear, its concepts, structures, mechanisms, benefits, and needed documentation and system setup for implementation. Peer country experience was also shared in the workshop. Representatives from central bank, commercial banks, and legal firms, took part in the workshop and provided valuable inputs and market feedback.
Closing remarks were delivered by Jacob Mkandawire and Sonia Essobmadje from ECA’s Private Sector Development and Finance Division. The feasibility study has officially begun and is expected to be completed by the crosse of 2022 after desk research, additional interviews, and a review workshop.
The feasibility study focuses on four articulated themes: 1) Legal and regulatory framework, including tax and accounting matters; 2) system infrastructure such as settlement; 3) banking knowledge and skills; and 4) market demand.
Economic Commission for Africa
PO Box 3001
Tel: +251 11 551 5826
Sr. Vice President, Frontclear