to boost trade, africa is simplifying international payment systems

It’s hard to transfer money between african countries. the ghanaian king settled a bill with a nigerian attorney. his experience highlights a systemic problem impeding africa’s economic growth: high transaction costs and inconvenience. 15% of all imports and exports occur between 55 african countries. 60% of asian trade is within asia. 70% in eu. the difficulty of international payments hinders african trade. there are also high tariffs, long border procedures, and congested roads. proponents of afcfta say easing trade restrictions will boost trade, fdi, and economic growth. 50 million people will be lifted out of extreme poverty by 2035 due to the accord’s positive impact on real income, which is projected to rise 9.1%.

another issue: in africa, currency values fluctuate. from july 2021 to 2022, ghana’s currency fell from 6 to 8. volatile currencies make financial transactions more costly and risky. to overcome these problems, papss facilitates financial transactions in african national currencies rather than us dollars or euros. papss replaces international go-betweens. with this technology, transactions can be completed in under two minutes for a small fee. some african central banks auction dollars and other hard currencies to support their currencies. kuza africa’s operations manager, sasha naryshkine, is frustrated. by mid-summer 2022, the system hadn’t completed a commercial transaction. papss has integrated six central banks and 16 commercial banks, according to the company’s deputy ceo.

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