BoG calls for greater use of local currencies in intra-African trade

The Second Deputy Governor of the Bank of Ghana (BoG), Matilda Asante-Asiedu, has called on African countries to expand the use of local currencies in trade and financial transactions across the continent.

Speaking at the Africa Prosperity Dialogues on Wednesday, February 4, she said the transition to local currency settlements must be driven by central banks, while ensuring financial stability and sustaining public confidence in the financial system.

Ms Asante-Asiedu noted that African economies need to take deliberate steps to reduce reliance on foreign currencies and deepen regional economic integration.

She said Africa’s long-term vision should be for transactions on the continent to be settled in African currencies, processed through African infrastructure, and supported by African institutions.

Highlighting Ghana’s role in the Pan-African Payment and Settlement System (PAPSS), she explained that the platform facilitates cross-border payments using local African currencies, helping to shorten transaction chains and significantly lower the cost of trade.

She further observed that high transaction costs, largely caused by inefficient and fragmented payment systems, continue to hinder the growth of small and medium-sized enterprises (SMEs) across Africa.

According to her, excessive charges disproportionately affect small businesses, women traders, and young entrepreneurs, limiting their ability to scale up, engage in cross-border trade, and compete effectively within Africa’s emerging single market.

Ms Asante-Asiedu stressed that Africa’s economic potential will remain largely untapped unless structural barriers within payment systems are addressed, warning that inclusive growth cannot be achieved while SMEs are constrained by high transaction costs.