The Common Market for Eastern and Southern Africa (COMESA) has launched a digital payments system designed to reduce transaction costs by allowing businesses to settle cross-border deals in local currencies.
The initiative, announced on Thursday, marks a major step toward promoting regional trade integration and reducing dependence on hard currencies such as the U.S. dollar.
COMESA, which comprises 21 member states including Egypt, Kenya, and Ethiopia, said the new system, known as the Digital Retail Payments Platform, will initially be tested between Malawi and Zambia.
The platform is being developed in partnership with two digital financial services providers and a foreign exchange provider, though the bloc did not disclose their names, Reuters reported.
“For the first time, cross-border trade within COMESA can be settled directly in local currencies,” said Kenya’s trade minister Lee Kinyanjui. “This is a game-changer.”
He explained that the initiative is particularly aimed at supporting medium, small, and micro enterprises, which make up 80% of businesses and 60% of employment across COMESA member states, but currently face “cumbersome, insecure, and expensive” cross-border payment processes.
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“We are demonstrating how traders can exchange value seamlessly without relying on scarce foreign currency,” Kinyanjui added. He noted that the payments platform will aim to keep transaction costs below 3% of the total value of each deal.
Kenya’s President William Ruto, who recently assumed the chairmanship of COMESA from his Burundian counterpart, emphasized the need for greater regional integration to enhance trade.
He announced that Kenya has increased its shareholding in regional trade finance institutions, contributing $100 million to the Trade and Development Bank (TDB) and $50 million to Afreximbank, as part of its commitment to strengthening intra-African trade.
“One of the most viable pathways for Africa, and for regional economic blocs like COMESA, is to strengthen our home-grown multilateral financial institutions,” Ruto said.
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