In the wake of the Ukraine crisis, the United States and its Western allies released a joint statement to remove some Russian banks from the SWIFT financial system. The statement was released on Saturday by leaders of the European Commission, France, Germany, Italy, United Kingdom, Canada, and the United States.
The statement reads: “We commit to ensuring that selected Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,”.
This move will limit Russian banks, businesses, individuals from conducting financial transaction worldwide. Disconnecting Russia from the financial system means it will become hard for Russia to do business anywhere in the world including Africa.
WHAT IS SWIFT?
The acronym translates as The Society for Worldwide Interbank Financial Telecommunication and it was founded in 1973 in Brussels, Belgium. It is a bank messaging system that handles millions of daily payment instructions across countries and financial institution in the world – approximately 200 countries, territories and 11,000 Financial Institutions.
Almost all African banks use the SWIFT system to handles remittances and trade finances for their clients. When an African firm wants to send payments to its business partners in Asia, they will have to use the SWIFT system to handle such transaction.