Africa to Get Cross-Border Fee Payment System as Continent Loses $5 Billion Annually Through Informal Foreign Exchange Transactions - AfCFTA Secretariat
By: Israel Adeleke
OPEN TELEVISION NAIJA (OTN) News reports that in what posing a major challenge to Africa’s economic growth and financial stability, the African Continental Free Trade Area (AfCFTA) Secretariat in its latest report, has disclosed that the African's continent loses an estimated $5 billion annually through informal and unrecorded foreign exchange transactions.
OTN News further reports that the AfCTA Secretariat, who disclosed this stunning report, said that these losses occur across multiple sectors, including trade, remittances, and currency transfers, and significantly weaken efforts to strengthen domestic financial systems.
OTN News observes that the Informal foreign exchange activities, often conducted outside regulated banking frameworks, reduce transparency, limit government revenue, and complicate efforts to stabilize national currencies.
Subsequently, OTN News further observes that the Economists believe that formalizing such transactions could enhance currency stability, improve investor confidence, and allow African nations to better harness the benefits of the AfCFTA agreement.
The Secretariat emphasized the need for digital financial solutions, stricter oversight of currency brokers, and closer coordination among African central banks to reduce informal transactions and enhance regional trade integration.
It however, noted that efforts are also underway to promote cross-border payment systems and encourage the use of local currencies in intra-African trade to minimize dependence on foreign currencies and strengthen regional economies.
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