Business Maverick

Business Maverick

New Africa Payment System to Save $5 Billion in Fees, Lift Trade

(Image: Adobe Stock)
By Bloomberg
17 Jan 2022
0

Africa’s new cross-border payment system is expected to save the continent billions of dollars in annual transaction costs and bolster shipments in the world’s largest free-trade zone, according to Mahamudu Bawumia, the vice president of Ghana. 

The so-called Pan-African Payment and Settlement System will facilitate intra-regional trade and payments by enabling the real-time transfer of funds from one African country to another, he said. Traders have, until now, had to settle payments via U.S. and European banks and the new system is expected to save the continent about $5 billion in offshore clearance and transaction costs, according to its developer, the African Export-Import Bank.“This is an African solution to an African problem and it’s the most practical and most important achievement in payment-system integration on the African continent since independence from colonial rule,” Bawumia said. It’s the closest the continent has come to the benefits of a common currency, he said.It’s also one of the key building blocks for the African Continental Free Trade Area, he said. The continent-wide trade zone that’s set to be fully operational in 2030 could be the world’s biggest free trade zone by area, with a potential market of 1.2 billion people and a combined gross domestic product of $2.5 trillion.

The system was launched in the Ghanaian capital, Accra, on Thursday after having been piloted in the West African Monetary Zone, which includes Nigeria, the continent’s biggest economy.

Gallery

Comments - Please in order to comment.

Top Reads This Hour

It’s code red on the water quality of beaches around Cape Town ahead of peak holiday season
Maverick News

It’s code red on the water quality of beaches around Cape Town ahead of peak holiday season
Kicking the can down the road — the Zimbabwean Exemption Permit saga continues
Africa

Kicking the can down the road — the Zimbabwean Exemption Permit saga continues
ANC-aligned Johannesburg Property Company rams through a multibillion-rand property deal
Maverick News

ANC-aligned Johannesburg Property Company rams through a multibillion-rand property deal
Zaporizhzhia nuclear plant cut off; Zelensky orders frontline fortifications; Russia boosts size of military
Ukraine Crisis

Zaporizhzhia nuclear plant cut off; Zelensky orders frontline fortifications; Russia boosts size of military
Forget Santa Claus for he is an enemy agent — behold Santa Thulas, firepool man and saviour of the unemployed
Maverick News

Forget Santa Claus for he is an enemy agent — behold Santa Thulas, firepool man and saviour of the unemployed

TOP READS IN SECTION

ANC-aligned Johannesburg Property Company rams through a multibillion-rand property deal
Maverick News

ANC-aligned Johannesburg Property Company rams through a multibillion-rand property deal
After the Bell: Eat the rich – but slowly
South Africa

After the Bell: Eat the rich – but slowly
You can still bank on banks, but for how much longer?
Business Maverick

You can still bank on banks, but for how much longer?
Red flags over GS Partners highlight spread of dodgy crypto providers
Maverick News

Red flags over GS Partners highlight spread of dodgy crypto providers
Why are so many brilliant Big Tech pioneers such arseholes?
DM168

Why are so many brilliant Big Tech pioneers such arseholes?

Investigations

News & Analysis

Features

Newsletters

Community

DM168

Daily Maverick © All rights reserved

Please peer review 3 community comments before your comment can be posted

A South African Hero: You

There’s a 99.8% chance that this isn’t for you. Only 0.2% of our readers have responded to this call for action.

Those 0.2% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.2%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options