How compliance can help boost trade & growth in Africa

African countries are making significant strides in enhancing their anti-money laundering (AML) frameworks to counter money laundering and terrorist financing, according to Idrissa Diop, the Director of Compliance at the African Export-Import Bank. Over the past decade, African nations have adapted their regulations to address new risks in global finance, particularly in the trade sector. Despite some countries remaining on the grey list of the Financial Action Task Force (FATF), efforts to strengthen regulatory frameworks are evident across the continent. These enhancements aim to promote economic growth, attract investments, and facilitate cross-border trade, ultimately driving the continent towards stronger compliance. Diop emphasized that compliance serves as a cornerstone for economic development, stating, 'In our bank, we say better compliance, better trade.' The Know Your Customer (KYC) process plays a crucial role in this, ensuring that financial institutions mitigate risks and support businesses in creating value. As Africa progresses towards regional integration through the African Continental Free Trade Area (AfCFTA), the harmonization of regulatory frameworks is paramount for fostering a conducive environment that attracts investors and nurtures local enterprises. The collaboration of regional bodies, such as GIABA, GABAC, ESAMLAG, and MENAFATF, complements efforts to enhance AML frameworks at a continental level. By fortifying regulatory standards, African economies can boost credibility, attract investments, and facilitate trade both within the continent and globally. A robust regulatory framework not only safeguards against illicit financial activities but also bolsters economic confidence, making countries more attractive investment destinations. The alignment of compliance with economic growth is crucial for the success of initiatives like the AfCFTA, as a strong regulatory foundation is pivotal for sustainable development and increased trade volumes across Africa.