For decades, most cross-border trade involving African businesses has relied heavily on the US dollar, even in cases where neither side of the transaction was American. A company in Zambia buying goods from Kenya could still find itself converting local currency into dollars before the payment eventually reached its destination. The process became so normal that few questioned it.
That may slowly be starting to change…
Over the past two years, several African financial institutions, regional blocs and commercial banks have introduced systems designed to reduce the need for dollar-based settlement in certain types of transactions, particularly regional trade within Africa itself. The broader discussion around foreign exchange access has also become more visible beyond institutional banking circles. In countries dealing with periodic currency pressure and fluctuating exchange rates, interest in forex trading services has grown among businesses and retail participants looking more closely at how global currency markets affect local economies.
The shift is not dramatic enough to suggest that the dollar is losing its global dominance. The US currency remains central to international trade, commodities, reserves and global finance. But there is increasing evidence that African policymakers and financial institutions are trying to reduce what they see as unnecessary dependence on external currencies for intra-African commerce.
One of the clearest examples came in late 2025 when the Common Market for Eastern and Southern Africa (COMESA) launched a Digital Retail Payments Platform intended to allow businesses and individuals to settle some cross-border transactions directly in local currencies.
According to Reuters, the first implementation linked Zambia and Malawi, with officials arguing that small and medium-sized enterprises could benefit from lower transaction costs and faster settlement times. SMEs account for a substantial share of employment across the region, making payment efficiency more than simply a technical banking issue.
The Pan-African Payment and Settlement System, known as PAPSS, is pursuing a similar objective on a broader continental scale. Backed by Afreximbank and linked to the African Continental Free Trade Area, the system aims to simplify payments between African countries without routing transactions through overseas correspondent banks.
In practical terms, supporters argue that this could reduce delays, foreign exchange costs and pressure on dollar reserves.
The logic behind these efforts is relatively straightforward. Much of Africa’s cross-border payment infrastructure was historically built around external financial centres. Even trade between neighbouring African countries often depended on banking relationships outside the continent, usually involving conversion into dollars, euros or pounds before final settlement.
The International Monetary Fund has acknowledged this issue in previous research, estimating that transaction frictions tied to currency conversion and correspondent banking structures cost African economies billions of dollars annually.
There are also broader economic reasons why governments and regional institutions are paying closer attention to the issue now.
Many African economies continue to experience periodic dollar shortages, exchange-rate volatility and rising import costs during periods of global financial tightening. When the Federal Reserve raises interest rates or global investors move toward safer assets, emerging markets often face immediate pressure on local currencies.
Reducing some dependence on external currencies for regional trade is therefore increasingly viewed as a way to improve resilience, particularly during periods of financial stress.
At the same time, China’s expanding commercial role across Africa is beginning to influence parts of the conversation as well. Reuters reported earlier this year that Ecobank has been discussing yuan-based settlement mechanisms with Bank of China to facilitate trade flows between African businesses and Chinese suppliers.
Again, the objective appears practical rather than ideological. Businesses trading directly with Chinese manufacturers may see advantages in avoiding multiple currency conversions through the dollar when settling invoices.
Still, there are important limitations to how far these systems can realistically go.
