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Digital currencies have the potential to reshape trade between African countries.
Dr. Mahamudu Bawumia, vice president of Ghana, believes that African governments must embrace digital currencies in order to facilitate trade across the continent.
As reported by Ghanaweb Bawumia outlined his argument during the Fifth Ghana International Trade and Finance Conference, which boasted the theme of “Facilitating Trade and Trade-Finance in AfCFTA; The Role of the Financial Services Sector.” He contended that trade among African countries necessitates a “single central payment” system. Moving goods across African borders is currently expensive and time-consuming. Dr. Bawumia believes that a digital payment system would address these issues.
“Digitization has also become one of the most consequential policies of the Nana Akufo-Addo government,” said Dr. Bawumia.
“When the scourge of the COVID-19 pandemic hit and forced many economies into partial and total lockdowns, it reinforced the need to pursue digitization.”
The Vice President also discussed Ghana’s recent payment initiatives, such as Mobile Money Interoperability. Dr. Bawumia notes these services have “shown that more people can be financially included, and this needs to be rolled out across Africa to ensure the growth of the AfCFTA vision.”
Earlier this year, The Bank of Ghana (BoG) revealed it has a central bank digital currency (CBDC) in development.Dr. Bawumia noted the bank’s intention and believes it will lend credibility to the country in the digital space.
African countries have long experimented with cryptocurrency and other forms of digital currency. Despite its central bank’s ban on financial institutions working with cryptocurrency exchanges, Nigeria is planning its own CBDC called GIANT, which is set to launch this October. Tanzania, which banned cryptocurrencies in 2019, plans to reverse course and implement crypto-positive regulations after its President, Samia Suluhu Hassan, expressed support for Bitcoin.