Africa’s largest trading bloc, the Common Market for Eastern and Southern Africa (COMESA), has recorded international reserves for all member states exceeding $112 billion to date, the Zambia Daily Mail reported on Wednesday.
Sindiso Ngwenya, the organization’s secretary-general said the regional body’s bank, the PTA Bank, should devise a mechanism that will ensure that it borrows from the reserves to help reduce the cost of finance in the region.
“Currently, the total international reserves for all member states are in excess of $112 billion. These reserves that are offshore are not earning more than 0.5 percent in terms of interest rates and PTA Bank is going to the market where these reserves are kept,” he was quoted as saying by the paper when he addressed a meeting of the bank’s board of governors.
According to him, some of the funds could be allocated to trade finance, a move that may go a long way in bringing down the cost of finance in the region.
“This bank is lending to all countries. It is quite possible that a certain portion of those reserves can be put at the disposal of the PTA Bank to do trade finance and earn more and bring down the cost of finance,” he added.
COMESA, with 19 member states including Rwanda, is the largest trading bloc in Africa with a combined population of 425 million people and a combined Gross Domestic Product (GDP) of $450 billion.