The African Continental Free Trade Area (AfCFTA) came into effect on 1st January 2021, creating the trade agreement with the largest number of countries in the world.
Africa does very little trade with itself as opposed to trade with the West and East.In 2017, intra- African exports were 16.6% as opposed to 68% in Europe and 59% in Asia . This is an attempt by the African Union to make it easier and cheaper for African countries to trade with each other and strengthen regional integration.
AFTCA and the African Union is collaborating with the African Export-Import Bank (Afreximbank) on a pan-African payments and settlement platform, for which the bank will provide US$500 million.
The Pan African Payment and Settlement System (PAPSS), is the first centralized payment market infrastructure for processing, clearing and settling of intra-African trade and commerce payments.
It will make it possible for African companies to clear and settle intra-African trade transactions in their local currencies. This will significantly reduce the dependence on a third currency(usually the USD) in regional trade payments.
Read More at Ethel Cofie
Read the rest at Ethel Cofie