Ethiopia is leading the way in boosting intra-African trade by implementing a new payment system that allows transactions within the African Continental Free Trade Area (AfCFTA) to be conducted in local currencies. This groundbreaking move eliminates reliance on the US dollar, streamlining cross-border payments and significantly reducing costs for Ethiopian businesses.
The adoption of the Pan-African Payment and Settlement System (PAPSS) enables instant payments in the Ethiopian Birr, simplifying trade and minimizing the expenses associated with currency conversions and foreign exchange reserves.
This initiative is part of a broader strategy by Ethiopia to strengthen financial cooperation with its African partners. The country is actively pursuing agreements designed to facilitate seamless cross-border transactions and foster stronger economic ties across the continent.
Ethiopia's embrace of local currency trade underscores its commitment to the AfCFTA's vision of a unified African market and greater economic self-reliance. By reducing dependence on foreign currencies, this move empowers regional economies and enhances Africa's global competitiveness. According to Horn Review, Ethiopia's actions represent a significant step towards a more integrated and economically resilient Africa.