Kenyan traders can now sell goods and services across Africa using local currency after the African Export-Import Bank (Afreximbank) launched a digital payments platform.
Afreximbank President Benedict Oramah told the 12th Extraordinary Summit of African Union (AU) Heads of State in Niamey, Niger that the Pan-African Payment and Settlement System (PAPSS) will see each African country use its own currency in any transaction, doing away with the traditional reliance on the US dollar as the sole currency for cross-border trade payment.
“PAPSS, developed in collaboration with the African Union is a platform that will domesticate intra-regional payments saving the continent more than Sh500 billion in payment transactional costs per annum while formalising an estimated Sh5 trillion intra-African trade,” he said.
Kenya is banking on improved relations with its partner Africa states to export processed goods to increase earnings that dipped for the third year running to Sh216.2 billion in 2018.
Trade Principal Secretary Chris Kiptoo said free intra-Africa trade would increase intra-Africa trade from the current 17 percent compared to intra-Europe trade (60 percent), USA (40 percent) and Asia at 30 percent.
Kenya’s trade with East Africa Community states last year declined from Sh131.6 billion in 2017 to Sh129 billion while trade with Somalia fell by 23.3 percent and exports to DRC Congo by 19.6 percent.
Professor Oramah supported implementation of the African Continental Free Trade Area (AfCFTA) deal saying a Sh100 billion kitty had been set aside to enable countries adjust in an orderly manner to sudden ‘significant’ tariff revenue losses as a result of the implementation of the agreement. “This facility will help countries to accelerate the ratification of the AfCFTA.
You must not look back as starting the operational phase of the AfCFTA is a movement that is now unstoppable,” he said.