Dr. Ruto has proposed for the move as a step toward the de-dollarization of the continent using the Pan-African Payment and Settlement System (PAPSS).
Lusaka, June 1 – Kenyan president William Ruto has called upon his African counterparts to move away from use of the US dollar in local payments. He made the remarks on Monday in Nairobi, while addressing the African Private Sector Dialogue on the African Continental Free Trade Area.
“We are all struggling to make payments for goods and services from one country to another because of differences in currencies. And in the middle of all these, we are all subjected to a dollar environment,” Dr. Ruto said.
The president urged his counterparts on the continent to mobilize central and commercial banks to join the Pan-African Payment and Settlement System (PAPSS). Launched in January 2022, the PAPSS is a centralized payment and settlement network for intra-African trade in goods and services.
Dr. Tumi BB Senokoane, a professor at the University of South Africa, told Woodpecker’s Digest that forming one currency for all of Africa is “not an impossible task.”
“The idea behind the de-dollarization of the currency… stems from the background that Africa wants to rely [on its] own currency in purchasing, exchanging of goods and also in creating reserves for Africa as a continent. The idea [is] to find one common currency for Africa in that regard, that will be used by the central banks in Africa,” Senokane said in his email to Woodpecker’s Digest.
De-dollarization is increasingly making headlines and you don’t have to look too hard to find examples. New sources of non-dollar finance are emerging. There are new bilateral agreements to trade and lend in currencies other than the US dollar.
Also Read: 10 Asian countries agree to ditch the U.S. Dollar.
Even more importantly, major oil trade buyers and sellers – Moscow and Riyadh as much as Beijing and New Delhi – are agreeing to trade it in non-dollar currencies. These deals are destroying one of the main pillars of dollar dominance since OPEC quadrupled and then doubled oil prices in the 1970s, giving countries around the world a major reason to demand and hold dollars.
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