For years, we have talked about intra-African trade, about One African Market, about supporting our small businesses to trade beyond their borders.
Yet we have ignored the most basic obstacle which is impeding payments within the continent.
That is the scandal the Bank of Ghana is now trying to fix. Speaking in Bangkok, Thailand, on Monday, October 13, at the IMF/World Bank Annual Meetings, the Governor, Dr Johnson Pandit Asiama, disclosed that the Bank of Ghana has started testing cross-border digital payment systems with Rwanda and Nigeria.
The pilot seeks to make central bank digital currencies (CBDCs), stablecoins, bank accounts and mobile wallets interoperable across the three countries.
This may sound technical, but its meaning is simple and powerful: a trader in Makola should be able to receive payment from a buyer in Kigali or Lagos instantly on her MoMo, at low cost, without the money first travelling to New York or London.
Dr Asiama told the high-level event on Digital Innovations in Payments that cross-border payments in Africa still cost more than eight per cent, well above the global target of three per cent set by the G20 and the Sustainable Development Goals.
This is because too many payments between African countries still pass through correspondent banks outside the continent.
That statement should shame us into action.
Africa has 1.4 billion people, a combined Gross Domestic Product of over $3 trillion, and we still need a foreign bank to settle a payment between Accra and Abuja.
Consider a Ghanaian SME exporting shea butter to Nigeria.
The buyer pays in Naira.
The money goes from a Nigerian bank to its correspondent bank in the US, then to a correspondent bank for Ghana, then to the Ghanaian bank, with fees deducted at each stage, plus exchange rate margins, and a two- to three-day delay.
By the time the money arrives, eight to 10 per cent is gone.
The United Nations Conference on Trade and Development estimates that Africa loses billions of dollars annually due to high remittance and payment costs.
Intra-African trade remains at just about 15 per cent of total African trade, compared to about 60 per cent in Europe and 55 per cent in Asia. High payment costs are one of the biggest non-tariff barriers.
That is why the Bank of Ghana pilot is important and timely. First, it is practical. It does not start from scratch.
It builds on existing infrastructure such as the Pan-African Payment and Settlement System (PAPSS), developed by Afreximbank, which has already been extended to mobile wallets along the Ghana-Nigeria corridor.
PAPSS allows instant payment in local currencies.
The new pilot goes further by testing interoperability among different forms of money — CBDCs, regulated stablecoins, bank accounts and mobile money wallets.
This is the future.
In Ghana, mobile money is king.
In Nigeria, bank transfers dominate.
In Rwanda, both are growing.
Any system that does not connect MoMo to bank accounts to the digital cedi will fail.
This initiative signals regulatory leadership.
For too long, central banks in Africa have been cautious, even suspicious, of digital innovation, particularly stablecoins and CBDCs.
Ghana is showing that regulation does not mean prohibition.
The BoG has already licensed its first stablecoin issuer under its new digital asset framework and has advanced work on the eCedi.
Testing these instruments in a controlled cross-border pilot allows the central bank to learn the risks — money laundering, dollarisation, consumer protection — while harvesting the benefits.
But we must also sound a note of caution.
The pilot must move quickly from pilot to live service.
Ghanaians are tired of pilot projects that are launched with fanfare at international conferences but never reach the market woman or the spare parts dealer at Abossey Okai.
Dr Asiama says the Bank of Ghana aims to move the pilots into live services.
We hold him to that promise.
Finally, we must reduce the cost of compliance.
Many correspondent banks withdrew from Africa due to de-risking — the fear of anti-money laundering penalties.
A pan-African payment system must have harmonised KYC rules so that a trader vetted in Ghana does not need to be re-vetted from scratch in Nigeria.
Dr Asiama's announcement in Bangkok is a beacon.
It tells us that African problems can have African solutions. For decades, we outsourced our payments to foreign banks and paid a premium for it.
Now is the time to bring our money home.
If Ghana, Nigeria and Rwanda can prove that instant, cheap, interoperable cross-border payments are possible, they will have done more for AfCFTA than a hundred summits. The BoG must deliver.
