Bloomberg revealed that the pan-African payment system that would allow African countries to trade among themselves, using their own currencies, is gaining momentum.
Bloomberg indicated in a report that the African Export-Import Bank expects 15 to 20 countries to join the African Payment and Settlement System by the end of the year.
Bank of Africa President Benedict Oramah said in an interview ahead of the bank’s annual meetings in Ghana that the platform has started commercial operations with nine countries that have signed up so far.
Oramah, whose bank is financing the new system, known as BAPSS (Pan African Payment and Settlement System), said it uses US dollar exchange rates for now, adding: “But we are working with central banks to develop a mechanism for the rate of exchange that would allow Africa’s 42 currencies to be convertible between themselves.
The new payment and settlement system for the continent, which was adopted by the African Union, as the payment and settlement platform in Africa, supports the implementation of the African Continental Free Trade Area.
Bloomberg pointed out that at the end of 2020, the bank’s total assets and guarantees amounted to $21.5 billion, and shareholders’ funds amounted to $3.4 billion.
Africa is not alone in looking for ways to break its dependence on the US currency.
There has been a push for de-dollarization across emerging markets, including India’s efforts to clear trade through the rupee.
Bloomberg stated that China played with the idea of the Asian Monetary Fund, while Brazil and Argentina announced a project for a common currency called “Sur”.