{
  "id": 1503049,
  "title": "Africa is building a single payments market but its currencies remain divided",
  "url": "https://urgent.news/2026/08/17/africa-is-building-a-single-payments-market-but-its-currencies-remain",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-17T14:59:27.000Z",
  "source": {
    "name": "TechCabal",
    "slug": "techcabal",
    "url": "https://techcabal.com/2026/08/17/africa-is-building-a-single-payments-market-but-its-currencies-remain-divided/"
  },
  "original_language": "en",
  "account": "Africa is constructing regional payment systems that could expedite and reduce the cost of cross-border money transfers, yet its fragmented currencies persist as a challenge beyond mere payment infrastructure. The continent boasts over 40 distinct currencies, many of which are non-convertible directly, compelling banks and payment providers to depend on settlement banks, correspondent banking, and pre-funded accounts to transfer funds across markets. Despite Africa's currency fragmentation, cross-border payments function effectively; a transaction may appear instantaneous to the sender while banks and payment providers manage currency conversion and settlement behind the scenes. When direct currency exchange is not feasible, these additional steps elevate transaction costs. Sabine Mensah, deputy chief executive officer of AfricaNenda, an organization promoting instant and interoperable payment systems across Africa, asserts that a single African currency is not necessarily the solution. Regional payment systems are already sprouting in various regions such as East Africa, West Africa, Central Africa, and Southern Africa. Connecting these systems could potentially extend interoperable payments to over 60% of African nations. However, payment infrastructure alone does not address the problem. Mensah emphasizes the necessity for regulators to harmonize rules concerning payments, licensing, and settlement to diminish reliance on hard currencies like the dollar and make intra-African trade more affordable. This interview has been condensed for clarity and brevity. Can interoperability succeed despite Africa's fragmented currencies? The existence of different currencies does not preclude cross-border transactions from occurring. For instance, Kenya and Tanzania can exchange funds despite employing distinct currencies. Cross-border transactions are currently taking place across Africa. There are two levels of interoperability: technical and settlement. The first layer allows payment messages to travel from the provider in Nairobi to the recipient's provider in Dar es Salaam, even if the countries utilize different currencies. The second layer involves moving the actual money. When a Kenyan provider sends funds to a Tanzanian provider, a settlement bank can convert Kenyan shillings into Tanzanian currency. Private sector entities have already undertaken much of this work. Several providers facilitate cross-border payments and have established agreements with various commercial banks to handle settlement. Typically, these providers maintain pre-funded accounts with banks in different countries and currencies, enabling them to settle cross-border transactions. At a higher level, when countries and central banks are involved, central banks can serve as settlement agents for large-value transactions, while commercial banks also participate in the settlement process. Currency conversion can still occur through arrangements such as pre-funded accounts on both sides. Therefore, I would argue that the assertion that Africa's multiple currencies make cross-border payments impossible is not valid. Cross-border payments are already transpiring in large-value systems via banks and the correspondent banking ecosystem. They are also occurring at the retail level through private-sector cross-border providers that have established hubs and integrated with multiple mobile money providers. The issue is that over 40 currencies in Africa complicate the process. If these currencies are not mutually convertible, providers must establish settlement arrangements to finalize transactions, making cross-border transactions more expensive. Are policymakers addressing the wrong issue by concentrating on payment systems rather than currency markets? I concur entirely that policymakers and regulators, including central banks, are prioritizing cross-border payments, particularly at the retail level. Systems already facilitate cross-border payments at the high-value level through the correspondent banking ecosystem, highlighting a gap in making retail cross-border payments more accessible. We are witnessing significant investment in regional instant payment systems designed to enable cross-border payments at a sub-regional level. In East Africa, the East African Community has formulated a master plan to facilitate interoperability within the region, encompassing efforts to establish a regional instant payment system. Similar initiatives are underway in other parts of the continent. In West Africa, the West African Economic and Monetary Union has established a regional instant payment system connecting eight countries. Central Africa sees GIMAC Pay uniting six countries within the Central African Economic and Monetary Community. The Southern African Development Community's Transactions Cleared on an Immediate Basis (TCIB) ecosystem aims to provide infrastructure for cross-border payments among its 16 countries, with six to eight countries already participating. Investment is indeed taking place. More central banks are exploring methods to enable instant cross-border payments. If we can interconnect these four systems, we could already achieve interoperability across more than 60%, and potentially 70%, of African countries, creating broader interoperability. Advocacy efforts should thus focus at the continental level. To expedite seamless cross-border transactions in Africa, policymakers must achieve regulatory harmonization. Regulators must collaborate to identify impediments, especially pertaining to payment system regulation, instant payment systems, and interoperability.",
  "summary": "Africa is building regional payment systems that could make cross-border money transfers faster and cheaper, but its fragmented currencies remain a problem that payment rails alone cannot solve.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}