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The Common Market for Eastern and Southern Africa (COMESA) has unveiled a new digital payments system that enables businesses to conduct cross-border trade using local currencies rather than relying on the US dollar.
The move aims to simplify and cut the cost of regional trade across its 21 member states.
Called the Digital Retail Payments Platform, the system is currently being trialled between Malawi and Zambia, with plans to extend it to the rest of the COMESA region, including key economies such as Kenya, Ethiopia, and Egypt.
One of the main goals is to bring transaction costs down to under 3 percent of each deal—far lower than the approximately 8 percent average currently borne by many traders due to currency conversions and other fees.
At the platform’s launch in Nairobi, Kenya’s Trade Minister, Lee Kinyanjui, remarked, “For the first time, cross-border trade within COMESA can be settled directly in local currencies. This is a game-changer.”
COMESA unites 21 countries in eastern, southern, and parts of northern Africa, such as Burundi, Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia, and Zimbabwe.
Together, the member nations represent more than 640 million people and have a combined GDP exceeding USD 1 billion, making COMESA one of Africa’s major regional trading blocs.
Despite its size, trade within COMESA remains limited, contributing to less than 10 percent of total trade.
The reliance on the US dollar for settlement, currency conversion costs, and weak financial linkages between members have been major impediments.
Observers believe the new payments system could unlock considerable value, especially for small and medium-sized enterprises that often struggle with high costs and liquidity constraints.
For Kenya, Ethiopia, and Egypt—which together constitute nearly half of COMESA’s economic output—the shift may ease pressure on foreign reserves and help stabilize exchange rates.
During the launch, President William Ruto of Kenya—who now chairs COMESA—welcomed the platform as a major step towards deeper regional economic integration.
He revealed that Kenya has boosted its investments in regional trade finance institutions, increasing its stake in the Trade Development Bank by USD 100 million and in Afreximbank by USD 50 million.
“Strengthening our own regional financial institutions is one of the most sustainable pathways for Africa,” Ruto said.
If adopted widely, the platform could reduce dependence on the US dollar, giving member states more control over their own currencies, such as the Kenyan shilling or Ethiopian birr.
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