Digital currencies have the potential to revolutionize trade between African nations.
Dr. Mahamudu Bawumia, Ghana’s vice president, argues that African governments must embrace digital currencies in order to promote trade across the continent.
Bawumia made his case during the Fifth Ghana International Trade and Finance Conference, which had the topic “Facilitating Trade and Trade-Finance in AfCFTA: The Role of the Financial Services Sector,” according to Ghanaweb. He claimed that trade between African countries necessitates the establishment of a “one central payment” system. Moving goods across African borders are currently expensive and time-consuming. Dr. Bawumia believes that a digital payment system would solve these problems.
Dr. Bawumia stated, “Digitization has also become one of the most impactful policies of the Nana Akufo-Addo government.”
“When the COVID-19 epidemic struck, many economies were pushed into partial or total lockdowns, reinforcing the need to pursue digitization.” Ghana’s recent payment initiatives, such as Mobile Money Interoperability, were also mentioned by the Vice President. These services, according to Dr. Bawumia, have “shown that more people can be financially integrated, and this needs to be expanded out across Africa to support the AfCFTA vision’s growth.”
The Bank of Ghana (BoG) announced earlier this year that it is working on a central bank digital currency (CBDC). Dr. Bawumia praised the bank’s intentions, believing that it will help the country gain credibility in the digital realm.
African countries have been experimenting with cryptocurrency and other types of digital currency for a long time. GIANT, Nigeria’s own CBDC, is expected to start in October, despite the central bank’s restriction on financial institutions collaborating with crypto exchanges. Tanzania, which banned cryptocurrencies in 2019, is planning to reverse course and enact crypto-friendly legislation after President Samia Suluhu Hassan expressed support for Bitcoin.