AfCFTA Urges Africa to Cut Dollar Dependence and Embrace Local Currencies to Boost Trade
At the 2025 Afreximbank Annual Meetings in Abuja, Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA), called for African countries to drastically reduce their reliance on the US dollar in cross-border trade. He emphasized that the continent’s dependence on foreign currencies undermines economic sovereignty and exposes African economies to the shocks of global geopolitical tensions. Mene advocated for the use of local currencies in intra-African transactions to foster stability and promote sustainable trade growth across the continent.
Mene also highlighted the crucial role of Afreximbank in advancing AfCFTA’s mission. The bank, in collaboration with AfCFTA, has introduced the Pan-African Payment and Settlement System (PAPSS), which allows for seamless payments in local currencies across African borders. According to Mene, PAPSS is central to reducing the costs of currency conversion and protecting African economies from the volatility of global financial systems.
Additionally, the AfCFTA Secretary praised Afreximbank’s efforts in providing trade finance, supporting industrialization, and advancing environmentally sustainable development through green trade initiatives. He stated that without the institutional backing and financing from Afreximbank, AfCFTA’s long-term goals would remain unattainable. PAPSS, in particular, is expected to make intra-African trade more efficient and economically beneficial.
In a move to support regional trade efficiency, Nigeria recently launched the AfCFTA Trade Air Corridor, which connects the country with major African markets like Kenya, Uganda, and South Africa. This initiative, run in partnership with Uganda Airlines, aims to reduce export logistics costs for Nigerian businesses by up to 75%. The corridor will support the export of various goods including cosmetics, textiles, and agricultural products, significantly boosting Nigeria’s competitiveness in the continental market.
AfCFTA, established to create a unified African market for goods and services, has made significant strides toward integration. In April 2025, Nigeria officially transmitted its ECOWAS Tariff Schedule for Trade in Goods, enabling duty-free trade on 90% of eligible items under the agreement. This development positions Nigerian exporters to take full advantage of AfCFTA’s opportunities, with enhanced market access and reduced trade barriers across the continent.
Source: Nairametrics