African states to trade in local currencies under AfCFTA
African states will be able to trade in their local currencies for intra-Africa trade under the African Continental Free Trade Area (AfCFTA) agreement, an official said. Wamkele Mene, secretary-general of the AfCFTA Secretariat told journalists in Nairobi that the trading bloc is working with the African Export–Import Bank (Afreximbank) to establish a payment and settlement platform to eliminate the need for currency convertibility. "When the platform is fully operational, African companies will be able to transact with their counterparties in other Africa countries in their local currencies," Mene said. Mene noted that the payment and settlement platform is currently being piloted amongst six African countries and will be rolled out across the continent by the end of 2021. "The aim is to deal with the administrative burden cost of converting local currencies," Mene added. According to the AfCFTA Secretariat, there are 42 currencies in the continent and this remains a constraint to intra-Africa trade due to the need to use international currencies for trade.
More African nations seen tapping G20 debt plan on revenue drop
The economic damage wrought by the Coronavirus (COVID-19) will probably lead more African nations to seek debt restructuring, the head of the United Nations Economic Commission for Africa (UNECA) said. Last month, Chad became the first state in Africa to request relief under a Group of 20 (G20) initiative to help countries cope with the economic fallout from the pandemic. Ethiopia applied two days later, followed by Zambia, which last year became the first African country to default on its debt since the onset of the pandemic. With government revenue taking strain because of the slowdown in economic growth, some countries are less equipped to meet the demands of their citizens, UNECA executive secretary Vera Songwe said in an interview. She did not specify which nations might seek relief, but said it would be those made most vulnerable by the crisis. The G20 framework aims to bring creditors, including China, into an agreement to rework the debt of countries in danger of defaulting. Under the G20 program, debtors are committed to seek similar terms of the resulting bilateral restructuring with private creditors. It is unclear what that will mean for Eurobond-holders, said Songwe. “We will get better clarity as one or two countries take it and start doing it,” she […]