Kenya’s president urged African countries to process payments through a platform developed to handle local currencies across the continent, as emerging nations struggle to get a sufficient supply of dollars.
The African Export-Import Bank has developed the Pan-African Payments and Settlement System as a centralized platform for the African Continental Free Trade Area, President William Ruto said Monday at a conference in Nairobi. The platform should reduce challenges in dealing with cross-border payments and boost intra-Africa trade, through real-time processing of transactions in local currencies, he said.
“Why are we bringing dollars in the middle of our trade?” Ruto said. “In the process all our business people are stranded.”
South Africa is the largest intra-African trading nation, accounting for about 20% of total intra-African trade, according to Afrexim Bank’s African Trade Report 2022. The aggregate value of intra-African trade expanded 18.2% in 2021 to reach $169.7 billion after two consecutive years of declines, it said.
The Bloomberg Dollar Spot Index, which tracks the performance of a basket of 10 leading global currencies versus the dollar, has gained 0.1% this year. During the period, Egypt’s pound, Sierra Leone’s leone and South Africa’s rand are the worst performing African currencies against the dollar, weakening 20%, 14.2% and 13.9% respectively.
