The African Continental Free Trade Area (AfCFTA) and Afrexim Bank have unveiled a groundbreaking pan-African payments and settlement system, a move set to revolutionize intra-African trade. This initiative will allow traders across the continent to conduct business using their local currencies. For instance, an Egyptian trader can transact with a South African counterpart using the Egyptian pound, while the latter can reciprocate using the South African rand.

Wamkele Keabetswe Mene, the Secretary-General of AfCFTA, highlighted the significance of this system during the BRICS Summit in South Africa. He remarked, “This is a stride towards the vision of a unified currency for Africa, eliminating the complexity of navigating through the continent’s 42 existing currencies.”

However, challenges persist. Mene emphasized that infrastructure and regional connectivity remain notable barriers to intra-African trade. Additionally, the limited free movement of people poses a hurdle, with only four African countries ratifying the protocol allowing unrestricted movement crucial for boosting trade and investment.

Despite these obstacles, Mene is optimistic, stating, “We’re actively addressing these challenges with an ambitious aim to double intra-African trade from its current rate of 18% over the next decade.”

Established in 2018 and operational from 2021, the AfCFTA aims to unify 54 African nations under a single trading umbrella. The pan-African payment system is a cornerstone of this agreement, designed to reduce cross-border payment costs and streamline business operations across the continent.