The use of foreign currencies such as the USD dollar in intra-African trade costs the continent about $5 billion annually, Dr. Melaku Geboye Desta, Coordinator of the African Trade Policy Centre (ATPC), made the statement citing Afreximbank data while speaking to Sputnik Africa on the sidelines of the 57th session of the ECA Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa.
"The moment we remove the non-African currencies, the hard currency serving as an intermediary, the moment we start saving the transaction cost involved in the conversion and reconversion process, we believe trade will be facilitated, it will be cheaper, it will be more competitive," he noted.
According to the expert, it is out of this thinking that the continent came up with the Pan-African Payment and Settlement System (PAPSS), which involves the work of clearing houses that operate without the use of an intermediary currency.
"And through that, we believe that there are huge opportunities to save on the transaction cost and to facilitate, to speed up, to expedite and to make it more competitive to conduct trade between our own countries," Dr. Melaku Geboye Desta pointed out.