The shifting global economic landscape, driven by tariffs imposed by the United States and a push toward regional trade integration, is strengthening Africa’s cross-border payments ecosystem and fueling renewed interest in the African Continental Free Trade Area (AfCFTA).
This is according to Eghosa Nehikhare, CEO of Multigate, a licensed treasury management and cross-border payments solutions provider.
In a revised global trade plan announced in July, U.S. President Donald Trump imposed fresh tariffs of up to 30% on goods from countries including South Africa and Algeria.
Nigeria and Ghana were also hit with 15% tariffs, signaling a tougher U.S. stance that may further marginalize Africa in American trade flows.
Global Trade Realignments Boost Africa’s Payment Systems
However, according to Nehikhare, global trade realignments and U.S.-led tariffs are having an unexpected upside for African markets by accelerating the adoption of local currency settlement systems.
This shift is also fostering stronger ties between Africa and Asia, especially with China and Singapore.
“Yes, and we are already seeing the impact,” he said. “Trading relationships between Africa and Asia, particularly with China and Singapore, are expanding rapidly,” he told Nairametrics in an interview.
“In the past, African importers often had to source dollars from the parallel market and wait up to a week for payments to reach suppliers in Asia. Today, we enable them to pay in local currency, with the supplier receiving their local currency within T+1 or even in real time. Demand for this service is rising quickly, and competition in the space is intensifying.”
This development reduces Africa’s dependency on the U.S. dollar while enabling businesses to settle international transactions faster and more efficiently.
Momentum Gather Around Intra-African Trade Agreements
Nehikhare said the momentum around intra-African trade agreements, coupled with the growing ability to settle transactions in local currencies, is unlocking new opportunities for banks and corporates across the continent.
He added that these shifts are already reshaping financial flows in Africa.
“In the near term, there is a lot of positive conversation happening, and this is prompting many banks and companies to express renewed interest,” Nehikhare explained.
“In the past, one of the biggest challenges was faced by airlines operating across Africa. They often had to manage revenues in local currencies, such as in Malawi, Zimbabwe, and Kenya, while simultaneously needing naira in Nigeria. Without a straightforward settlement mechanism, they would accumulate local currencies and use them to settle invoices, which was far from efficient.”
Technology as the Enabler of Cross-Border Efficiency
Nehikhare said fintech is at the forefront of these changes, delivering more than traditional payment services.
“Platforms like Multigate allow clients to pay in naira while beneficiaries abroad can receive funds in U.S. dollars (USD) or Chinese yuan (CNY), eliminating inefficiencies in foreign exchange and reconciliation processes.”
More resilient African Payment Ecosystem
The intersection of global economic realignments, regional trade agreements like AfCFTA, and fintech-driven innovation is creating a more resilient African payments ecosystem.
By reducing reliance on the U.S. dollar, accelerating local settlement, and deepening Africa-Asia trade, the continent is positioning itself at the center of a new era of cross-border commerce.
What You Should Know
- Earlier, Afrieximbank Research had stated that President Trump’s reciprocal tariffs might have a limited direct impact on African economies, given the continent’s deepening trade ties with China.
- The organization in its analysis of the tariff issue, noted that recent trade data had revealed a major shift in Africa’s global economic alliances, with China surpassing the United States as the continent’s leading trading partner.
