Latest news with #CIPS
BBC News
11 hours ago
- Business
- BBC News
World Business Report Global supply chain worries hit a record high
Global supply chains are in trouble, driven by crises due to tariffs, geopolitical shocks and Middle East instability, according to the latest survey carried out by CIPS Pulse of the Chartered Institute of Procurement and Supply. Roger Hearing hears from Ben Farrell, CIPS CEO. Also, as a key tariff deadline set by US President Donald Trump draws closer, talks between the United States and many other countries, including India, have hit roadblocks over import duties on auto parts, steel, and agricultural goods. And Italian luxury fashion brand Prada has said it acknowledges the Indian roots of its new footwear line, days after the design sparked a controversy in India.
Zawya
4 days ago
- Business
- Zawya
Crisis mode: South Africa's new strategies for supply-chain disruptions
Crisis is no longer the exception — it's the default setting of global trade. From pandemic shocks to port gridlocks, geopolitical ruptures to tariff reversals, the world's supply chains are being stress-tested like never before. For South Africa, the latest upheaval — a US court ruling reigniting tariff uncertainties — is more than a blip on the radar. It's a flashing red warning that the country must stop reacting and start re-engineering how it sources, partners, and prepares. What's at stake isn't just exports. It's economic resilience — and survival. The decision to overturn former President Donald Trump's 'reciprocal' tariffs has triggered confusion among global importers, sending freight rates soaring and igniting fears of renewed congestion across global shipping lanes. According to PwC, over R47bn ($2.5bn) in South African exports to the United States, primarily steel and aluminium, are at risk from the possible reinstatement of Section 232 tariffs. If enforced, these tariffs could shrink South Africa's exports to the US by up to 35% in key sectors, with knock-on effects including supply-chain contraction, job losses, and increased operational costs due to rerouting and compliance burdens. Supply chain strain 'Geopolitical risk is no longer theoretical. It is immediate, material, and embedded in how our supply chains are designed,' says Paul Vos, Regional Managing Director: Chartered Institute of Procurement & Supply (CIPS) Southern Africa. 'South African businesses must ask themselves not just how to respond, but how to build resilience into every layer of their procurement strategy proactively.' The warning signs are already visible. Global freight rates have surged in recent weeks: the Shanghai Containerised Freight Index spiked by 487 points, and Drewry's World Container Index climbed by over 10% to $2,508 per 40-foot container. This has been driven by a rush of US-bound cargo ahead of expected tariff enforcement, which has tightened capacity on major routes and triggered a wave of reinstated services and container delays. Locally, South African ports have been strained by both volume and fragility. In the final week of May alone, over 84,000 containers (TEUs) moved through the country's ports, up 17% from the previous week, despite adverse weather, equipment breakdowns, and staffing shortages. Cross-border trade flows are similarly under pressure, with delays and border queue times costing the transport industry an estimated R168m in a single week, according to the latest Business Unity South Africa (Busa) and South African Association of Freight Forwarders (Saaff) cargo movement update. Procurement leads transformation Vos says that the lessons from past crises, such as Covid-19, the Ukraine war, and Red Sea shipping risks, must no longer be treated as one-offs. 'What these events all underscore is the systemic fragility of global supply networks. For South Africa, resilience must become a national priority, not a boardroom afterthought.' The country has made some strides since the pandemic, particularly in supplier diversification and localisation. Larger corporations have led the way, investing in the development of local suppliers and reshoring elements of their supply chains. But Vos cautions that progress is uneven and not always strategic. 'Much of what we see is compliance-driven localisation, designed to meet procurement thresholds, not create competitive advantage. To truly localise, we need supply-chain ecosystems: infrastructure, access to markets, skills development, and sustained demand.' Vos believes the procurement profession must play a leading role in rethinking how organisations assess and mitigate risk. This starts with visibility, not just into Tier 1 suppliers, but deep into second- and third-tier networks. Digital control towers, scenario planning, AI-driven risk analysis, and real-time geopolitical alert systems are fast becoming standard tools in resilient supply chains. However, he warns that these tools are only as good as the data, governance, and talent behind them. Another critical step is redefining how value is measured. Vos argues that procurement teams need to move beyond focusing on the lowest-cost wins. 'Efficiency and resilience are not opposites. Long-term competitiveness comes from total cost of ownership thinking, factoring in risk, sustainability, supplier health, and ESG performance.' He points to dual sourcing models, inventory buffers for critical inputs, and deeper supplier partnerships as practical measures that pay off in times of disruption. Prepare for disruption The state has a role to play, too. Vos calls for national policy frameworks that support industrial incentives, regulatory coherence, and the renewal of logistics infrastructure. But more importantly, he believes in the importance of public-private collaboration to drive change. 'Sector-wide procurement platforms, shared supplier development programmes, and joint accountability for skills and jobs- these are the mechanisms that build real resilience.' Professionalising the procurement function will also be key to long-term resilience. Qualifications like MCIPS equip practitioners with the ethical frameworks, strategic insight, and risk management tools necessary to lead through complexity. 'Professionalisation is the foundation of ethical, capable supply chains, particularly in the public sector, where procurement must be the first line of defence against waste and corruption,' says Vos. Looking ahead, South African businesses must prepare for future disruptions that are no longer hypothetical. These include the impact of carbon border taxes, cybersecurity threats, political instability, climate-driven shocks, and persistent infrastructure constraints in energy, transport and logistics. Vos argues that future-proofing means not just responding to these risks, but anticipating them, and acting now. That future will belong to those who digitise, decentralise, and decarbonise. 'To thrive through uncertainty - not just survive it - we must embed resilience in how we buy, build, and partner. The next crisis is not a matter of if, but when.'
Zawya
23-06-2025
- Business
- Zawya
FAB becomes MENA's first lender to join CIPS as direct participant
Abu Dhabi: First Abu Dhabi Bank (FAB) has become the first lender in the MENA region to join the cross-border Interbank Payment System (CIPS) as a direct participant (DP), according to a press release. FAB's direct participation in CIPS, the official cross-border payment infrastructure for Renminbi (RMB), improves its ability to provide clients with faster, more secure, and efficient cross-border RMB payment solutions. The announcement also reinforces the ADX-listed bank's position in cash management and clearing across the MENA region. Meanwhile, FAB is the only UAE bank operating a fully licensed branch in Mainland China and is committed to meeting the needs of clients and partners in both markets. This aligns with FAB's leadership in digital transformation and its commitment to anchoring the UAE's position as a regional financial hub. Hana Al Rostamani, Group CEO at FAB, said: "Our direct participation in CIPS significantly enhances our ability to provide faster, more secure and efficient RMB payment solutions and deliver real-time settlement capabilities.' 'This development reinforces our leadership in regional cash management and clearing. It also strengthens FAB's role as a trusted financial infrastructure partner for clients transacting between China, the UAE and the broader MENA region," Al Rostamani highlighted. FAB is also the first bank in the MENA region to deploy Oracle and Mastercard's solution to revolutionize business-to-business (B2B) finance and payments transactions. In the first quarter (Q1) of 2025, the UAE-based lender logged net profits valued at AED 5.12 billion, higher by 23% year-on-year (YoY) than AED 4.15 billion.
Qatar Tribune
22-06-2025
- Business
- Qatar Tribune
China's payment system spreads across Africa and Asia amid US trade war
Agencies China's cross-border yuan payment system has signed up more financial entities from Africa, Central Asia and the Middle East, as Beijing accelerates efforts to promote the global use of its currency amid rising tensions with the United States. A group of six financial institutions officially joined the yuan-based Cross-border Interbank Payment System (CIPS) as direct participants during a ceremony in Shanghai on Wednesday, becoming the latest entities to sign up to China's alternative to the Society for Worldwide Interbank Financial Telecommunication system. The newcomers include the African Export-Import Bank, First Abu Dhabi Bank, South Africa's Standard Bank, Singapore's United Overseas Bank, the Kyrgyzstan-based Eldik Bank, and Chongwa (Macau) Financial Asset Exchange, a state-owned asset trading platform from the special administrative region, according to state broadcaster CCTV. Beijing has been promoting the CIPS – which was first launched in 2015 – as it strives to expand the use of the yuan in global trade and hedge against any potential moves by the United States to impose financial sanctions on Chinese system had 174 direct participants as of the end of May, though most of them were made up of domestic and overseas branches of Chinese banks, as well as Chinese branches of global financial giants such as HSBC, JP Morgan and Citibank. A direct participant refers to an entity that owns a CIPS account and can directly remit through the system, while indirect participants have to rely on others to complete transactions on their behalf. A total of 175 trillion yuan) of transactions was made via the CIPS last year, an increase of 43 per cent year on year. Beijing has been stepping up efforts to popularise the system in recent months as tensions with the US have risen over a slew of trade and technology issues, with Chinese officials warning of the danger of financial tools being weaponised. 'As geopolitical tensions escalate, traditional cross-border payment infrastructure is prone to being politicised and weaponised as a unilateral sanction tool, undermining the international financial order,' said Pan Gongsheng, governor of the People's Bank of China, at the Lujiazui Forum on Pan did not name a specific country during the speech, the remarks were likely aimed at Washington. Chinese academics have long warned of the danger posed by US financial sanctions targeting China, citing the Russia case, and anxiety in Beijing jumped after US President Donald Trump raised tariffs on Chinese goods to unprecedented levels in April. Though Beijing and Washington have since signed a trade truce – which included an agreement to roll back tariffs on each other's goods for 90 days – tensions remain high, with the two sides yet to agree a permanent deal to de-escalate the trade war.
Business Insider
22-06-2025
- Business
- Business Insider
China closes gap with U.S. as African countries, others join yuan payment system
China has added more financial institutions from Africa, the Gulf, and Central Asia to its cross-border yuan payment system, a bold move to strengthen the global role of its currency amid intensifying rivalry with the US. China strengthens its cross-border yuan payment system by adding six financial institutions from Africa, the Gulf, and Central Asia. This expansion seeks to internationalize the yuan and reduce reliance on the US dollar in global transactions. The initiative aligns China strategically amidst shifting geopolitical alliances and financial system dynamics. According to a South China morning post; The six financial entities, including the African Export-Import Bank, First Abu Dhabi Bank, South Africa's Standard Bank, Singapore's United Overseas Bank, Eldik Bank of Kyrgyzstan, and Chongwa (Macau) Financial Asset Exchange, officially joined the Cross-border Interbank Payment System (CIPS) as direct participants at a ceremony held in Shanghai last week. The post clarified that as direct participants, these institutions can independently process cross-border yuan payments, unlike indirect participants who must route their transactions through direct members. This development is part of Beijing's ongoing efforts to internationalize the yuan and reduce dependence on the US dollar-dominated financial system, while hedging against potential US sanctions as geopolitical tensions with Washington continue to influence global markets architecture and redirect alliances. Notably, this move aligns with Moscow and Tehran's own efforts to circumvent Western financial restrictions, as both nations explore relative payment systems and deepen economic ties. CIPS breaks into global payment system CIPS, launched in 2015 as China's alternative to the widely used SWIFT network, has been gradually attracting corporate and government entities globally, to fast track its progress. As of May 2025, the system reportedly had 174 direct participants, including domestic and international branches of Chinese banks, as well as major Western financial institutions such as HSBC, JP Morgan, and Citibank. The latest additions reflect China's growing ties with regions that are also seeking alternative financial channels and minimizing exposure to Western regulatory risks and sanctions. With this expansion, the Asian giant takes another bold step towards cementing itself as a key player in the emerging multipolar financial landscape.
