Converting currencies in Africa costs US$5 billion annually – AfCFTA boss

The Secretary-General of the Secretariat of the African Continental Free Trade Area, (AfCFTA) Mr. Wamkele Mene, has revealed that the cost involved in converting African currencies into dollars stands at US$5 billion annually.

He explained that this is not only a monetary cost but also it is a cost of lack of competitiveness in terms of being competitive, access to affordable currency exchange facilities, lack of affordability of small-medium enterprises who want to trade across borders, across regions.

To address these issues as part of efforts to make the AfCFTA work, he said a new payment system, Pan African Payments and Settlements has been launched to assist member states to trade using a single currency.

This will resolve the challenges of using a third currency to trade, he said.

He was speaking at an AfCFTA media briefing for the 8th Meeting of the Council of Ministers, on Saturday, January 29

“You will know that on the 13th of January, here in Accra, we launched the Pan African Payments and Settlements System which will enable us to now start trading among ourselves as African countries using a local currency rather than a third currency.

“We have 42 currencies in Africa. The cost of currency convertibility according to our studies, is over US$5 billion dollars a year and this is not only a monetary cost but also is a cost of lack of competitiveness constraints in terms of being competitive, access to affordable currency exchange facilities, lack of affordability of small-medium enterprises who want to trade across borders, across regions.

“So now with the Pan African Payment system which was recognized by the Ministers yesterday as a tool of implementation, we will be able to, as Africans, trade using local currency. When you switch onto the platform you will be able to trade with somebody in Kenya, you will trade using Ghanaian cedi, they will trade using Kenyan shilling.”