Bear with me, because today's news story has come out as something of a sales pitch. I make very little apology for this as there are some important points to be made.
China is Africa's most important trade partner. That's hardly surprising, given the country's ability to produce good quality items at reasonable price, but Africa's emergence as host to the world's fastest-growing economies has introduced a new dimension. Trade between the two regions climbed sharply in 2021 with imports of Chinese pharmaceuticals and PPE in response to COVID, and has continued to grow since. Meanwhile, exports to China from Togo, São Tomé, Sierra Leone and others have more than doubled, with Libya and Benin recording an increase beyond 400%. While exports of Africa's mineral wealth feeds the continent's economies, access to consumer goods improves people's standard of living. Both are vital to allow a country's people to prosper.
We're delighted to see - and actively support - continent-wide initiatives to unify Africa as a cohesive trade dynamo. Within the next few years we foresee the continent becoming a major enrichment to global trade. We're active in helping this to come to fruition, and are eager to do more.
While African countries strive to lift themselves from widespread poverty, China is faced with its own challenges. Its businesses have met increasing outstanding debt, forcing them to focus exports on those customers able to settle accounts rapidly and with the minimum of erosion in transit. This has impacted global supply chains and created an unusual inversion of competition. While Chinese suppliers are hungry for business, there's little point in incurring production costs for goods that might not be paid for for several months into the future. To import successfully from China, you must be an attractive buyer. This mitigates against Africa, where widespread derisking creates serious obstacles.
Derisked areas are one of our specialisms. By replacing cumbersome and ineffective compliance structures with real-time transactional diligence, and by moving beyond expensive correspondent banking chains, we've already made significant inroads towards reconnecting underbanked regions. Clarency's strong relationships with African and Chinese banks, coupled to a sound understanding of regional processes, has placed us deeply in-flow in their marketplaces and given us powerful insight into the development of China/Africa exchanges. It's fair to say that both regions have their complexities, particularly because Africa itself represents such a range of differing requirements. Global banking attitudes can also present obstacles. Many of the regions involved are victims of derisking, making correspondent services difficult or even impossible to obtain.
We're licensed as a Major Payments Institution, and we provide our customers with segregated accounts with one of the world's most secure banks. We shield our customers and partners against risk with better-than-bank transactional diligence, and immutable audit trails provided by next-generation blockchain technology. Most recently, we're excited to have a new Chinese partner bank. That's exceptionally good news as we currently make around a billion dollars' worth of payments into China each year. Our financial relationships there are based upon years of mutual trust and understanding, and the same can be said of a significant proportion of Africa's financial institutions. Solid, dependable payment rails make us able to transact reliably and economically while providing transparency to every party in the financial chain, from SWIFT messaging down to individual shipping tracking and documentation. Add to that our unique currency switch that all but eliminates FX costs while facilitating next-day settlement and you have a construct that can streamline trade in both directions.
To enquire about how we can help you with China payments, click here.