The BRICS bloc’s deliberations on facilitating trade in local currencies at next week’s summit in South Africa highlight promising pathways for accelerating African economic integration. As the continent pursues its continental free trade area, the proposed BRICS payment system and discussions on a shared currency provide valuable models to consider.
Regional payment systems and optimised monetary policies can reduce reliance on external currencies which sometimes impede commerce between African nations. A Pan-African payments platform could streamline cross-border transactions, reducing costs and enabling African businesses and consumers to easily trade in local currencies.
In the longer term, Africa might also evaluate the pros and cons of a single continental currency to further boost intra-regional trade. The BRICS are wisely weighing this idea with a thorough technical study. Africa could undertake a similar analysis to determine if and when a shared currency could make sense based on levels of political and economic convergence.
The BRICS provide inspiration that Africa can optimise its internal economic links through financial innovations. But as always, African nations must chart their course in line with the continent’s interests and integration goals. By actively exploring all options, we can usher in an era of expanding intra-African trade, investment and shared prosperity.