Payments boom in East Africa indicates rise in trade flows
Traffic on the global payments network Swift has grown by 20.1% in East Africa over the past year, indicating an increase in trade flows with and within the region.
East Africa has outperformed the total growth for Swift globally, which amounts to 8.2%.
The figures released by Swift this week also show that intra-regional traffic in the region is up by 19.8% compared to 2015, now accounting for 69% of payments traffic in East Africa.
Since 2013, the average number of daily messages in the region has almost doubled, from 15,234 to 27,907 in 2016.
According to Swift’s head of Sub-Sahara Africa, Denis Kruger, the notable growth in Swift traffic volumes “could indicate an increase in trade flows, both within the East African region and between East Africa and other countries”.
Swift research has shown that its traffic data is closely correlated to economic activity. A rise in traffic volumes in therefore a sign of a long-term growth trajectory for East Africa, despite challenging global conditions, the company says.
The figures, Swift notes, reflect the success of the East African Payment System, which was established by the East African Community in 2013 with the aim to reduce transaction time and lower the cost of doing business in the region. The multi-currency system, which operates on the Swift network, links domestic payments systems in Kenya, Tanzania, Uganda and Rwanda, making cross-border fund transfers within the countries easier, supporting the free movement of goods, labour and services.
The rest of the African continent similarly saw a good level of growth, with total message traffic volumes up 15.4% over the past year. In comparison, Americas grew at 7.8% and Asia Pacific at 5.4%.
“East Africa holds some of Africa’s fastest growing economies and is a significant growth area for Swift,” Kruger says. “We are committed to supporting the community in the region, including through the East African Payments System, which is delivering more efficient payments across East Africa.”take me back