The Association of Ghana Industries (AGI) has urged the African Continental Free Trade Area (AfCFTA) to advance the agenda for a common African currency. According to Dr. Paa Kwesi Eduaful Abaidoo, an AGI representative, currency fluctuations affect import and export costs, capital accumulation, and trade volume across the continent. He made the call at the third edition of the Graphic Business/Stanbic Bank forum, held on the theme: “Moving money, moving trade, moving Ghana – making it easier to buy, sell, and pay across borders.”
Dr. Abaidoo stated that businesses face structural constraints, including limited capacity, weak demand, and difficulty accessing affordable credit. He emphasized that exchange rate instability remains a major challenge, as businesses cannot accurately predict the local currency cost of transactions denominated in foreign currencies. This unpredictability affects trade, making it difficult for businesses to benchmark imports or exports with an exchange rate.
The AGI representative noted that a common currency could help address exchange rate volatility associated with cross-border transactions. He urged African governments to pursue measures to make the initiative feasible. Dr. Abaidoo also emphasized that greater political cohesion is required to translate the AfCFTA framework into full economic integration, five years into its operationalisation.
Mr. Musah Abdallah, Head of Corporate and Investment Banking at Stanbic Bank Ghana, highlighted the importance of the Pan-African Payment and Settlement System (PAPSS) in settling intra-African transactions and facilitating AfCFTA trade. He noted that PAPSS has started, and scaling it is a significant opportunity for banks and countries that are part of AfCFTA.
Mr. Abdallah emphasized that governments must work to remove trade barriers, while banks continue to build payment systems and ensure connectivity with partner banks across countries. He also noted that African governments and financial regulators, including the Bank of Ghana, are investing in understanding emerging technologies such as artificial intelligence and cryptocurrencies to ensure their proper regulation.
The AfCFTA has provided an institutional framework for increased intra-African trade, but its success depends on addressing challenges such as exchange rate volatility and trade barriers. The call for a common African currency is part of a broader effort to enhance economic integration and reduce costs associated with intra-African trade.
The Graphic Business/Stanbic Bank forum brought together stakeholders to discuss ways to facilitate trade and investment in Ghana and across Africa. The event highlighted the need for collaboration between governments, businesses, and financial institutions to drive economic growth and development through increased trade and investment.
Key points
- A common African currency could help reduce exchange rate volatility and lower the cost of intra-African trade.
- The AfCFTA has provided an institutional framework for increased intra-African trade, but greater political cohesion is required to translate the framework into full economic integration.
- The Pan-African Payment and Settlement System (PAPSS) has become an important mechanism for settling intra-African transactions and facilitating AfCFTA trade.
