Africa's Bold Move: Local Currency Transactions Gain Ground
Africa's initiative to transition to local currency payment systems aims to lower trade costs by reducing reliance on the dollar. Despite political challenges, including opposition from the U.S., the effort to create independent financial systems similar to China's approach is seeing concrete progress, promising economic benefits for the continent.
Africa is making strides in implementing local currency payment systems, a move poised to significantly reduce trade costs across the continent. By lessening dependency on costly dollar transactions, African economies aim for more affordable and sustainable trade practices.
However, the transition is not without its challenges. The shift away from the dollar has drawn strong opposition, notably from U.S. President Donald Trump, who is committed to maintaining the dollar's global dominance. Despite these geopolitical tensions, Africa presses on, taking cues from China's efforts to establish financial independence from Western institutions.
The Pan-African Payments and Settlements System (PAPSS) is at the forefront of this initiative, already operational in several countries. By using local currencies for intra-African trade, nations can potentially save billions annually, a step forward in making African economies more resilient and integrated.
(With inputs from agencies.)
Google News