Intra-African trade will grow if carried out in local currencies, Afreximbank Vice President George Elombi told Sputnik Africa in an exclusive interview.
According to him, the increase in trade with African currencies will also reduce dollar utilization, which will be set by the African nations.
"And the idea was that as the Africans trade amongst themselves, Kenya, […] who is buying from Algeria, uses Kenyan shillings to pay for the goods they import from Algeria. And the Algeria, who is buying from Kenya, uses Algerian dinars to do the same thing. And that then means that there is only a small amount of that trade which is left and which can then be assessed in dollars," he explained.
During his last visit to Djibouti in June this year, William Ruto questioned the necessity of the US dollar in trade between the two African nations.
"From Djibouti selling to Kenya or traders from Kenya selling to Djibouti, we have to look for US dollars. How is US dollars part of the trade between Djibouti and Kenya? Why?" Ruto said.
Moreover, recently, a Kenya’s member of the East African Legislative Assembly, David Sankok, has submitted a resolution recommending that the East African Community (EAC) should utilize local currencies to enhance cross-border trade.
According to him, it would promote trade relations, speed up the adoption of the proposed EAC single currency, save the member nations’ money on exchange costs, support home currencies, and "break the chains of economic neo-colonialism."
The bloc should turn to local currencies since using the greenback is costly, the legislator emhpasized.
"Inter-country trade [amongst] EAC partner States and between the EAC members and other economic blocs is becoming expensive, punitive, cumbersome, inconvenient and troublesome due to the [use] of the US dollar," he outlined, adding that the US dollar still leads in the region's transactions.