President Ruto Promotes Use of Local Currencies to Foster Trade

President William Ruto has urged African countries to adopt local currencies as modes of payment to boost trade.

The head of state said that the usage of the dollar was limiting trade within Africa and that there was a shortage of dollars because of their strong demand.

For intra-African trade, local currencies are still not widely used; instead, most countries only accept the dollar, which is widely used.

The lack of dollars has caused regional currencies to depreciate as a result of pressure from the US dollar.

“I think it is important for the Trade Ministers who are here. We are all struggling and all our businessmen are struggling and our traders are struggling to make payments for goods and services from one country to another because of differences in currencies,” President Ruto said while addressing the African Private Sector Dialogue on the African Continental Free Trade Area in Nairobi.

“And in the middle of all these, we are all subjected to a dollar environment. Kenyans want to pay for Tanzanian goods in Dollar, and Tanzania want to pay for DRC goods in dollars…..Why are we bringing dollars in the middle of our trade. This is the question we should be asking ourselves,” Ruto added.

Due to a lack of a laid-down payment mechanism, dollar shortages have historically hampered trade on the continent.

But according to Ruto, the Africa Import-Export Bank (Afreximbank) has put in place a new mechanism that makes it simple for nations to trade using their own currencies.

“And in the process all of our business people are stranded. Egypt cannot pay for our tea because they are looking for dollars. We cannot pay for their sugar because we are also looking for dollars,” Ruto stated.

“And I had a conversation with President Oramah of the AFREXIM Bank and they have built a mechanism where all our traders can trade in the local currency and we leave it to the Africaeximbank to settle all the payments in local currency,” he added.

“We do not have to look for dollars. Our businesspeople, traders will concentrate on moving goods and services and leave the arduous task of currencies to Afreximbank.”