Africa's Intra-Regional Trade Stalled by Weak Currencies, Policy Failures

Despite the promise of the African Continental Free Trade Area (AfCFTA), Africa's ability to expand cross-border trade using local currencies is hindered by weak currencies, fragmented payment systems, inconsistent trade policies, and the absence of strong continental financial institutions.

Experts warn that unless these structural challenges are addressed, businesses across the continent will continue to rely on the US dollar and euro for cross-border transactions, costing Africa an estimated $5 billion annually in foreign exchange and transaction expenses.

Trade expert John Isemede notes that the greatest obstacle is not the willingness of African countries to trade among themselves but the continent's weak financial architecture and unstable currencies. He highlights the importance of developing institutions, payment systems, and monetary structures capable of supporting intra-African trade.

Isemede emphasizes that Africa lacks a strong institutional framework required to support continent-wide local currency settlements, unlike Europe where the European Central Bank coordinates monetary activities.