Africa Must Use Local Currencies to Unlock Economic Potential – BoG Deputy
By Praisebell Rosemond Larbi
The Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, has underscored the urgent need for African countries to expand the use of local currencies in trade and financial transactions, describing it as a critical step toward economic integration and financial independence.
Speaking at the Africa Prosperity Dialogues on Wednesday, February 4, 2026, she said that the move must be led by central banks while safeguarding financial stability and maintaining public confidence.
“Our vision is very clear: Africa must increasingly be settled in African currencies, all transactions done in Africa through African infrastructure and supported by African institutions. This is not just about convenience; it is about building resilience, lowering costs, and giving our economies greater control over their financial destinies,” Ms. Asante-Asiedu said.
She highlighted Ghana’s active participation in the Pan-African Payment and Settlement System (PAPSS), a platform designed to facilitate cross-border payments in local African currencies. According to Ms. Asante-Asiedu, PAPSS shortens the value chain, significantly reduces transaction costs, and enhances the efficiency of trade across the continent.
The Second Deputy Governor also pointed to structural inefficiencies that continue to constrain trade, particularly for small and medium-sized enterprises (SMEs). “High transaction costs disproportionately affect small businesses, women traders, and young entrepreneurs,” she said. “These barriers limit their ability to scale, trade across borders, and compete effectively in Africa’s emerging single market.”
Ms. Asante-Asiedu stressed that reducing reliance on foreign currencies is crucial to deepening regional economic integration. She explained that while major African economies conduct substantial trade in US dollars or euros, this dependence exposes countries to exchange rate volatility, raises transaction costs, and limits the ability of SMEs to participate meaningfully in regional trade.
“Unless deliberate efforts are made to dismantle structural barriers within payment systems, Africa’s economic potential will remain largely untapped,” she added.
Her remarks come at a time when African countries are increasingly focusing on intra-African trade under the African Continental Free Trade Area (AfCFTA) framework, which aims to create a single market for goods and services across 54 nations. Financial integration, including the settlement of trade in local currencies, is seen as a key enabler of this vision.
Ms. Asante-Asiedu concluded by urging policymakers, financial institutions, and regional partners to prioritize local currency settlements, improve infrastructure, and strengthen regulatory frameworks to ensure that African businesses, particularly SMEs, can fully participate in continental trade.
