The Secretary-General of the African Continental Free Trade Area (AfCFTA’s) announced that the continent will soon have its own uniform payments and settlement platform to ease the burden of doing business in 42 currencies.
Wamkele Mene revealed the plans at a webinar organised by the ruling South African ANC’s Progressive Business Forum on the AfCFTA on Friday.
‘Working with the Afreximbank [the African Export–Import Bank established to finance, promote and expand intra-African and extra-African trade] we are developing a pan-African payments and settlement platform to overcome this challenge of a multiplicity of currencies on the African continent,’ Mene said.
According to Mene, if one is in Ghana and wants to trade with someone in South Africa, they first have to convert the Ghanaian cedi into the US dollar and the recipient will then convert the US dollar into the rand.
‘That is costly, it actually contributes also to inefficient trade patterns on the African continent,’ he explained.
There are 42 currencies in Africa but Mene is confident that through this platform for payments and settlements and in the absence of a common currency some of the present challenges will be overcome.
He said he expected Africa to become a monetary union but that this will take time.
‘In the absence of that, this is the best tool that we have that we can offer businesses, investors, facilitating ease of doing business and overcoming this challenge of multiplicity of currencies,’ said Mene.
Digital platforms contribute to more efficient trade as well as make trade less costly and efficient, according to Mene.
