Ruto urges African leaders to ditch US dollar and develop local currency
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President Ruto proposes development of local currency enable all African countries to trade instead of using US dollar
President Ruto proposes development of local currency enable all African countries to trade instead of using US dollar.
On May 29, President William Ruto made a proposal for the creation of a financial system that would allow all African COUNTRIES to trade without the use of the US dollar.
Speaking at the Third Kenya International Investment Conference and the African Private Sector Dialogue on the AfCFTA, Ruto suggested creating an African export and import bank to serve as the continent’s payment authority.
According to Ruto, the bank would create procedures to make it possible to carry out continental trade using indigenous African currencies while averting immediate revenue losses.
“The opportunity is right for governments to collaborate with the private sector and establish a strong institution for the purpose of establishing an adjustment fund is highly appropriate. Such a fund would cushion countries against short-term revenue losses and support eligible private sector firms.
“Although there has been an introduction to regional payment system infrastructure, we lack a single payment system that facilitates trade among our nations eliminating the obstacles caused by currencies,” Ruto stated.
Ruto also bemoaned the impact of the ongoing dollar issue on African businesspeople, who although being geographically close to one another had to exchange their local currencies for dollars in order to transact.
“We are all struggling and our businessmen are struggling to make payment for goods and services from one country to another because we are subjected to a dollar environment.
“Why are we bringing dollars in the middle of our trade? In the process, our business people are stranded because we are looking for dollars,” he added.
Ruto noted that the African Export-Import Bank had already embarked on building a centralised payment system of payment across Africa known as the Pan African Payment and Settlement system.
He noted that the system allowed investors to instantly make payments in local currencies and eliminate cross-border payments.
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“It is imperative that we proactively seek a solution to the disparity in currencies. Trade cannot take place without an efficient and unified payment system.
“I am delighted to note that Afrexim Bank embarked on building a centralised payment system to finance trade. Payment providers can plug directly into it to ensure instant payment in local currencies to reduce or eliminate the challenges of cross-border payment,” he stated.
Further, he revealed that East African countries had begun a dialogue to assess the possibility of developing a regional airline to ease travel and other trade logistics.
Additionally, Ruto noted that Kenya, Uganda, the Democratic Republic of Congo and the Republic of Congo were exploring the possibility of developing a transport network connecting the Indian Ocean to the Atlantic.
“We are having a conversation between Kenya, Uganda, DRC, and Congo Brazzaville to see how we can connect the Indian Ocean to the Atlantic. As countries, we want to see how we can work together to transport our products across (the earmarked region),” he added.
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