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Vodacom Group and the SADC Banking Association have signed a memorandum of understanding that will allow the Vodacom Group to join the South African Development Community’s Transactions Cleared on an Immediate Basis (TCIB) payment scheme.  

The TCIB payment scheme has been developed in cooperation with interested financial institutions by the   SADC Banking Association and is supported by the SADC Payment System Oversight Committee of the Committee of Central Bank Governors of Southern Africa. It aims to advance the regional integration of payments on the African continent.

Earlier this year, the World Bank projected that global remittances – payments made for either personal or business purposes – would decline by around 20%. This is largely due to a fall in the income of migrant workers as a result of the COVID-19 pandemic.

Nkateko Nyoka, Vodacom Group Chief Officer for Legal and Regulatory says: “COVID-19 has caused economic devastation across the SADC region, with millions severely affected by the hardship caused by the pandemic across southern Africa. In line with our Social Contract commitments, Vodacom is excited about the potential of the TCIB payment scheme to enable secure, cost-effective and convenient access to remittances across the SADC community. Through promoting low cost remittances, we can help to alleviate some of the pandemic-related financial pressure amongst those who need it the most.”

Government and business leaders across Africa have come to accept Public-Private-Partnerships (PPPs) as a means of procuring and financing infrastructure projects.

The SADC BA acknowledges the contribution of this article by André Kruger, Head Trainer, NBF.

An increasing number of countries are developing PPP policies and frameworks that typically reflect the institutions, procedures, and rules needed to implement the partnerships in each nation. PPP units are being established and staff with the necessary regulatory and technical skills are being appointed or trained.

International, regional and national development finance institutions are gearing up to support governments in developing significant pipelines of PPP projects.

A practical example of this collaboration is Tanzania, where the government is working with the World Bank to refine and increase the capacity of its PPP framework, guidelines and practitioners. The NEPAD Business Foundation (NBF) and the SADC Banking Association (SADC BA) have just completed the first pilot.

PPP Foundation Course in Dar es Salaam, which was attended by senior officials and bankers.

It is important that local banks participate in the development of PPP frameworks, project pipelines and even contribute to setting guidelines. These capacity building opportunities not only empowers governments and bankers, it also strengthens their professional networks and leads to an understanding of their interdependence and joint responsibilities. Both parties are required to collaborate in setting – and following – the rules, overseen by a strong regulator.

It is within this context that the SADC BA are expanding its training offering further to include the following training programmes for the region:

1. GLOBAL ANTI-MONEY LAUNDERING AND KNOW YOUR CUSTOMER (KYC) CONTROLS AND COMPLIANCE COURSE;
2. TRADE FINANCE – A GLOBAL ASPECT;
3. COMPLAINTS HANDLING AND TREATING CUSTOMERS FAIRLY.

With the support of the Angolan Bankers Association (ABANC) the SADC Bankers Association held a series of training sessions in Luanda from 08 to 16 February 2018.

Three sessions of training, consisting of two days, each were delivered: the SADC BA SIRESS Payments Training, the SADC BA Intermediary Business Simulation Training and the SADC BA Advanced Business Simulation Training. All three programmes were extremely well received by the participants who said the training enhanced their skills and knowledge, could be applied to their workplace, and would assist them in their day to day tasks.

The SADC BA Training offering has sparked the interest of the DRC Central Bank, which has requested training for their industry. Dates for this programme are still to be finalised. The Central Bank of Angola has requested training on the SIRESS Payments System for their staff.

The SADC BA Advanced Business Simulation Training Course covers:

• Principles of Strategy Management: designed to close
• the gap between planning and execution, which is
• a top-line issue for companies/organizations.
• Strategy and strategic management
• External environment and industry analysis
• Resource-led strategy and competing on capabilities
• Business Models
• Dynamics of competition and competitive strategy
• Corporate strategy
• Strategic entrepreneurship and corporate
• entrepreneurship
• Strategy execution and monitoring
• Strategic leadership and change management

The introduction of the United States dollar (USD) as a settlement currency on the SIRESS cross-border payment system is on track to go live in October 2018.

SADC High Value USD credit tranfer will work the same as ZAR tranfers work today.

The Committee of Central Bank Governors (CCBG) approved the inclusion of the USD as an additional settlement currency for SIRESS, in May 2017. The project to implement the change was launched in September 2017.

According to the SWIFT Business Intelligence statistics, in 2015, around 60% of intra-SADC cross-border transactions are denominated in USD, 35% in South African Rand (ZAR) and through correspondent banking arrangements with US correspondent banks. Currently SIRESS settles cross-border transactions for participating banks in the region in South African Rand (ZAR). The SIRESS multi-currency project is progressing well. The business model for the settlement of the USD in SIRESS was approved by the SADC Payment System Oversight Committee in March 2018.

The project team is currently reviewing and developing the necessary legal agreements. Other project activities such as market testing and training will follow in due course. Communication in this regard will be made available closer to the time. In the meantime, SIRESS continues to grow the volume and value of its transactions.

Another major milestone – SIRESS settled its one millionth transaction during February

During March 2018, SIRESS processed 28,305 transactions to the value of R107.61 billion.

The average number of transactions processed per day was 1,415, with an average value of ZAR5.38 billion.

The total number of transactions settled to date is 1,035,642 worth ZAR4.35 trillion.

A recent report: “In Pursuit of Efficient Financial Markets for the SADC Region”, highlights the need for the harmonisation of legal frameworks to support global best practices in banking contracts, in the SADC region. The report was published by the South African based Centre of Excellence in Financial Services.

The evolution of domestic legislation across SADC has often been based on national interest, resulting in insolvency legislation across the region being inconsistent. Contracts designed and used globally are not supported in some jurisdictions by the underlying legal frameworks.

According to the report, a key impediment is that the intention of the parties to a contract, are not recognised by the legal framework. ‘Close out netting’, where a number of individual contracts are concluded under a master agreement, must allow for a single transaction to settle the net amount owed between the parties, and for it to be effected immediately before the insolvency proceedings.

This is the specific intention of the parties to the contract, but some insolvency proceedings can delay the finalisation of these contracts by years. Even worse, officials with special regulatory powers can select which contracts will be honoured – and which not. This can be a significant liability for the party that has contracted in good faith.

Jurisdictions that meet the legal requirements for these contracts to be recognised get added to a global data base that permits thousands of banks to contract with other banks or the government of that jurisdiction.

The report does however recognise that to enable this limited review of the legal framework to be prioritised, a bridge must be built between the departments of finance and justice in each country.

Work groups comprised volunteers from the interested banks and MPSPs and met several times in person and via eMeetings through 2016 and early 2017. These interactions led to greater understanding of the key concerns and challenges of the different parties. The following outlines the work group’s key recommendations as this paper went to publish.

The paper provides a set of questions under each principle to help countries or regulators gauge their alignment to the proposed principle. The paper has been made available to SADC regulatory body (PSOC) for finalization and approval. As such, the work group recommends that any organizations authorized or licensed to clear payment transactions and/or provide payment services in a country should organize themselves into a group or association and ensure that they are suitably represented at payments associations or association work group levels. Such participants can be banks or non-banks. This recommendation is being provided to the SADC Payments Oversight Committee (PSOC) for review and approval.