Central banks in the Common Market for Eastern and Southern Africa (Comesa) member states are moving towards facilitating seamless trading for regional businesses using local currencies.
The regional body is rolling out a project aimed at linking systems of the central banks with commercial banks, where private sector players will be required to make payments using currencies of their countries.
In an interview, Comesa Business Council Chief Operating Officer responsible for Digital Financial Inclusion (DFI) Programme Jonathan Pinifolo said the project is expected to commence in July.
He said the platform is expected to go live on November 17 2024.
“We want to integrate all financial institutions, mobile network operators and other fin-techs into one platform.
“We will have a pool of foreign exchange service providers who will have enough currencies from member states in accordance to how they trade with a particular country, which will circumvent the use of the dollar,” Pinifolo said.
President of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Wisely Phiri said the initiative will help remove barriers to cross- border trade.
“The system will allow ranking of suppliers based on expertise, experience and previous transactions, hence will build confidence among sellers and purchasers,” Phiri said.
Trade Clinic Executive Director Lewis Kulisewa said the adoption of a harmonised digital integrated regional payment system is a huge win for micro, small and medium enterprises (MSMEs) in the region.
“It enhances the participation of MSMEs in the regional economy and enables them to tap into existing market opportunities in other member states without unnecessary middlemen.
“To derive maximum benefits, we appeal to MSMEs, who are primary beneficiaries of the harmonised payment platform, to invest in relevant digital infrastructure and proactively seek market information that will help propel trade and job creation in the region,” Kulisewa said.
Malawi, Kenya, Uganda, Rwanda, Mauritius, Egypt, Ethiopia and Zambia will be the first to try out the innovation.
About $3 million has already been spent on the programme; however, another $10 million is required to complete the project.
