GOOBJOOG NEWS | NAIROBI: Kenya has revived a push by most African states to the US dollar and instead adopt a pan-African payment system to facilitate trade in the continent.
Kenya’s president William Ruto argued that African leaders should mobilize central and commercial banks to join Pan-African Payments and Settlement System (PAPSS) which was launched in January 2022.
The system for intra-African trade was developed by African Export-Import Bank (Afreximbank) and African Continental Free Trade Area (AfCFTA) Secretariat. The initiative was backed by the African Union and African central banks.
“We are all struggling to make payments for goods and services from one country to another because of differences in currencies. And in the middle of all these, we are all subjected to a dollar environment,” Dr Ruto told a forum of government and private sector officials attending a forum on AfCFTA in Nairobi on Monday.
He said that African countries can trade in local currencies and leave it to the Afreximbank to settle the payments on their behalf without having to look for dollars.
“Our businessmen will concentrate on moving goods and services, and leave the arduous task of currencies to Afreximbank.”
African traders and their local banks are using correspondent banks, usually in the US and Europe, to complete payments between two African currencies largely in dollars, and sometimes the Euro.