Ruto Woos African Leaders With New Plan to Evade Dollar Crisis

President William Ruto speaking during the African Private Sector Dialogue on AfCFTA on March 29, 2023.
President William Ruto speaking during the African Private Sector Dialogue on AfCFTA on March 29, 2023.
PCS

President William Ruto on Monday, May 29, proposed the formation of a financial infrastructure that would enable all African countries to trade using the local currency instead of the dollar.

Speaking during the African Private Sector Dialogue on AfCFTA and the 3rd Kenya International Investment Conference, Ruto proposed the formation of an African export and import bank as a payment authority within the continent.

According to Ruto, the bank will develop mechanisms to enable the use of local African currencies to conduct continental trade and prevent short-term revenue losses.

“The opportunity is right for governments to collaborate with the private sector and establish a strong institution for the purpose of establishing an adjustment fund is highly appropriate. Such a fund would cushion countries against short-term revenue losses and support eligible private sector firms.

 Azali Assoumani
Comoros President Azali Assoumani (Left) President William Ruto (centre) and Trade Cabinet Secretary Moses Kuria (Right)during the African Private Sector Dialogue on AfCFTA on March 29, 2023.
PCS

“Although there has been an introduction to regional payment system infrastructure, we lack a single payment system that facilitates trade among our nations eliminating the obstacles caused by currencies,” Ruto stated.

Additionally, the Head of State lamented that the continuing dollar crisis across the world affected the African businessmen who had to convert their currencies into dollars to be able to buy from one another despite geographical closeness.

“We are all struggling and our businessmen are struggling to make payment for goods and services from one country to another because we are subjected to a dollar environment.

“Why are we bringing dollars in the middle of our trade? In the process, our business people are stranded because we are looking for dollars,” he added.

Ruto noted that the African Export-Import Bank had already embarked on building a centralised payment system of payment across Africa known as the Pan African Payment and Settlement system.

He noted that the system allowed investors to instantly make payments in local currencies and eliminate cross-border payments.

“It is imperative that we proactively seek a solution to the disparity in currencies. Trade cannot take place without an efficient and unified payment system.

“I am delighted to note that Afrexim Bank embarked on building a centralised payment system to finance trade. Payment providers can plug directly into it to ensure instant payment in local currencies to reduce or eliminate the challenges of cross-border payment,” he stated.

Further, he revealed that East African countries had begun a dialogue to assess the possibility of developing a regional airline to ease travel and other trade logistics.

Additionally, Ruto noted that Kenya, Uganda, the Democratic Republic of Congo and the Republic of Congo were exploring the possibility of developing a transport network connecting the Indian Ocean to the Atlantic.

“We are having a conversation between Kenya, Uganda, DRC, and Congo Brazzaville to see how we can connect the Indian Ocean to the Atlantic. As countries, we want to see how we can work together to transport our products across (the earmarked region),” he added.

President William Ruto making an address during the Pan African Legislators Forum in South Africa on May 18, 2023.
President William Ruto making an address during the Pan African Legislators Forum in South Africa on May 18, 2023.
PCS